contents - atulauto.co.in · cmd atul auto ltd. from the cmd’s desk: 1: company information:...

From CMD’s Desk 01

Company Information 02

Product Range 03

Management Team 04

Company Overview 07

Financial Performance 08

Our Presence 10

Notice of Annual General Meeting 11

Directors’ Report 17

Management Discussion & Analysis 22

Report on Corporate Governance 31

Shareholders’ Reference 43

Independent Auditor’s Report 47

Financial Statements 52

Significant Accounting Policies and Notes on Financial Statements 55

Contents

J J ChandraChairman

& Managing Director

Dear stake holders,

We are pleased to inform you that we have ended fiscal 2013 with a growth of 22% in turnover values and 19% in vehicle sales. Our revenues for the financial year 2013 stood at Rs.362.86 Crores, a year on year growth of 22%. The profit after tax was Rs. 25.92 Crores, a year on year growth of 66 %. We are pleased to recommend a final dividend of Rs. 6/- per share for fiscal 2013.

The FY 2013 was another crucial and important year for us where in spite of negative growth experienced by the industry, Atul continued the momentum of handsome positive growth. During this journey we have, as an organisation, achieved a lot which we had never imagined were possible. However, this journey has not been easy and we have come across many hindrances along the way. Time and again, our elasticity has been put to the test. We had to overcome challenges that could have changed the fortune of our organisation.

To board on a journey of success one needs the tools of awareness, prudence and approach. These lead to the path of growth and high quality operation. It is imperative to combine these three forces in an industry, where the business environment is completely dynamic and customer expectations are high. Be it very fast changing trends in technology, industry and business models, or regulatory challenges, we had to steer ourselves clear of wild situations many a time. Economical and suitable transportation is an essential need of mankind today and our vision is to “devote ourselves for the betterment and comfort of the common man through our advanced technologies, product and services in the automotive field”.

While realising our responsibility each member of Atul Auto Limited, is attempting to make it one of the most competitive companies in the industry with emphasis on efficiency in operations, reliability for customers and thrust on optimising the available resources and development of new products as well as markets. Along the way, we have created self-employment for the users and improved their livelihoods by providing the best products and services.

Our strength lies in strategically integrating vision with technology, advanced process for manufacturing thru efficient use of resources and aspiration about maintaining high levels of quality in products & post sale services. As our research assets, business infrastructure and human capital integrates to carry a robust performance to provide a drive to the Indian three wheeler auto industry as whole.

Gearing up for the upcoming time, we have the key success elements necessary to withstand the winds of change. The inspiration provided to build a highly skilled and creative research and development team, which is supported by the state-of-the-art infrastructure. Our consistently increasing market presence with a strong product portfolio, which is being marked up with newer brands. Streamlined and efficient manufacturing capabilities, which boosts of technical prowess, high quality production and cost effectiveness. Also a well monitored marketing and distribution network, which is aimed at attaining brand equity among our wide-reaching customer base.

The success and reputation of Atul Auto Limited began as the dream of one man extended to be transformed into the dream of many. We strive to accomplish our dreams and goals to bring greater future.

As we enter another financial year, we look forward to receiving your continued trust and support.

J J ChandraCMD

Atul Auto Ltd.

From the CMD’s Desk

1

Company Information

Jayantibhai J Chandra Chairman and Managing Director

Mahendra J Patel Whole time Director

Niraj J Chandra Whole time Director

Vijay K Kedia Non Executive and Non Independent Director

Adv. Hakubhai J Lalakiya Independent and Non Executive Director

CA Hemantkumar J Bhatt Independent and Non Executive Director (From 27th December, 2012)

Hasmukh H Adhvaryoo Independent and Non Executive Director (From 27th December, 2012)

CA S T Shah Independent and Non Executive Director (From 10th November, 2012)

Suresh Kaneria Independent and Non Executive director (Up to 27th December, 2012)

CA Rajesh Dhruva Independent and Non Executive Director (Up to 27th December, 2012)

Ramniklal Kotecha Independent and Non Executive Director (up to 10th November, 2012)

Board of Directors

Board Committees

Audit CommitteeCA S T Shah, Chairman CA Hemantkumar J Bhatt, Member Adv. Hakubhai J Lalakiya, Member

Shareholders’ Grievances Committee CA Hemantkumar J Bhatt, Chairman CA S T Shah, Member Hasmukh H Adhvaryoo, Member

Remuneration CommitteeHasmukh H Adhvaryoo, ChairmanCA S T Shah, Member Adv. Hakubhai J Lalakiya, Member

Cost AuditorsAshish Bhavsar & AssociatesPractising Cost Accountants

Survey No. 86, Plot No.1 to 4,National Highway 8-B,Near Microwave Tower,Shapar (Veraval),Dist. Rajkot - 360024, Gujarat, India Phone: 02827-666000E-Mail: [email protected] / [email protected]: www.atulauto.co.in

Sharex (Dynamic) India Pvt. Ltd.Unit No. 1, Luthra Ind. Premises,1st Floor, 44-E, M Vasanti Marg,Safed Pool, Andheri Kurla Road,Andheri (East), Mumbai – 400 072Phone: 022-2851 5606, 2851 5644E-Mail: [email protected]/[email protected]: www.sharexindia.com

IDBI Bank Ltd. BSE LimitedScript Code - 531795

Company Secretary and Compliance OfficerCS Purvi P Mehta

AuditorsMaharishi & Co.,Chartered Accountants

Secretarial AuditorsMJP Associates Practising Company Secretaries

Registered Office & Manufacturing Facility

Bankers of the Company Stock Exchange

2

Registrars & Share Transfer Agents

Product Range

Gemini Dz-

2 3

ManagementTeam

J J ChandraChairman &

Managing Director

M J PatelWhole time Director

V K KediaDirector

N J ChandraWhole time Director

INDIVIDUALLY we are one DROP, but TOGETHER we are an OCEAN.

4

Adv. H J LalakiyaDirector

H H AdhvaryooDirector

CA H J BhattDirector

CA S T ShahDirector

INDIVIDUALLY we are one DROP,

P ZachariahVice President

Sales & Marketing

J V AdhiaVice President

Accounts & Finance

A PadmanabhanMentor

but TOGETHER we are an OCEAN.4 5

Niraj ChandraWhole time Director

For more than two decades, Atul Auto Ltd. is renowned leading manufacturer of 3-wheeler commercial vehicles in the state of Gujarat. From common men’s favourite vehicle CHHAKADA to today’s ATUL Shakti, ATUL GEM, ATUL Smart and now Atul Gemini-Dz, Atul Auto Ltd. has come a long way.

The Company was originally incorporated as a Private Limited Company on 18th June 1986 under the Companies Act, 1956, in the State of Maharashtra. Subsequently the Registered Office was shifted to Jamnagar(Gujarat) & then to Rajkot(Gujarat) on 24/1/92 & 20/4/94 respectively.

The Company manufactures 3-wheelers in the sub 1 tonne category targeting the passenger and cargo segment. In passenger segment, the Company manufactures the Diesel & CNG powered carrier for carrying 3 to 6 passengers. In the cargo segment, the Company manufactures vehicles with a rated carrying capacity of 0.50 tonne. Both these vehicles have been approved by the Automotive Research Association of India under the Bharat Stage-III.

The Company has its existing plant at Survey No.86, Plot Nos. 1 to 4, Shapar Industrial Zone, N.H. 8-B, at Village Shapar, at a distance of 18 kms from Rajkot. The plant commenced its commercial production from July 1992 and the present installed capacity is 48000 vehicles (from April 2013) per annum.

The company has improved its market position in the domestic 3-wheeler industry with incremental market share in the goods as well as passenger carrier in 0.5 Tonne segment (third large player in 0.5 T three wheeler industries). This has happened with established distribution network, increase in capacity and launch of new products. The company has 150 exclusive dealers, more than 100 sub-dealers, 14 regional offices and 3 training centres in 16 states of India.

Company Overview

7

(Rs. In lacs)

(In lacs, except per share data)* After giving effect of Bonus shares issued in the year 12-13 in the ratio of 1 : 2

Particulars 12-13 11-12 10-11 09-10 08-09Revenue from operation 36,286 29,798 20,159 11,985 11,682

Total Income 198 59 108 123 413

Earnings before Depreciation, Finance cost and Tax Expenses (EBDIT)

4,206 2,814 1,542 1,159 550

Depreciation and Amortisation 444 426 425 389 246

Exceptional Items - -13 - - -23

Profit for the year 2,592 1,559 943 454 46

Equity Dividend % 60% 50% 40% 20% 5%

Dividend payout 770 425 272 137 34

Equity Share Capital 1,097 731 608 608 608

Reserve and surplus 6,310 4,854 3,427 2,756 2,439

Net worth 7,407 5,585 4,035 3,364 3,047

Gross Fixed Asset 6,863 6,113 6,311 5,823 4,264

Net Fixed Assets 4,807 4,154 4,265 4,282 3,008

Market Capitalization 16,238 8,393 6,788 2,619 1,284

Key Indicators

Earnings Per Share* 23.62 16.51 10.74 5.17 0.53

Turnover Per Share 330.73 271.59 221.04 131.41 128.09

Book Value Per Share 67.51 50.91 44.24 36.89 33.41

EBDIT/Gross Turnover % 11.59% 9.44% 7.65% 9.67% 4.71%

Net Profit Margin % 7.14% 5.23% 4.68% 3.79% 0.39%

RONW % 34.99% 27.91% 23.37% 13.50% 1.51%

Financial Performance 2012-13 2011-12 Growth (%)

Income 36,582 29,942 22.2

Gross Profit 6,363 4,662 36.5

Operating Profit (PBIDTA) 4,206 2,814 49.5

Profit after Tax 2,592 1,559 66.3

EPS(par value of 10/- each : Basic & Diluted after bonus)

23.62 16.51 43.04

Dividend Per Share 6 5 20.0

Financial Position

Capital Expenditure 960 847 13.3

Fixed Assets ( Including Capital WIP ) 4,807 4,154 15.7

Cash and Cash Equivalents 3,807 1,137 234.8

Net Current Assets 2,842 1,549 83.5

Total Assets 12,295 9,663 27.2

Debt - 389 (100)

Net Worth 7,430 5,609 32.5

Market Capitalization 16,238 8,393 93.5

Financial Highlights

The Year at a Glance

FinancialPerformance

8

0.53

10.74

16.51

23.63

5.17

1284

67888393

16238

2619

3048 33654036

7430

5609

2009 2010 2011 2012 2013

2009 2010 2011 2012 2013

46 454

943

1559

2591

2009 2010 2011 2012 2013

2009 2010 2011 2012 2013

CAGR 19.51%

12.65Times

66% inFY

2012-13

20159

29829

36384

11985 11681

2009 2010 2011 2012

CAGR 25.51%

2013

Turnover

Basic EPS*

Market Capitalizations

Net Worth

Profit After Tax

8 9

JAMMU& KASHMIR

HIMACHAL

UTTRRANCHAL

PUNJAB

HARYANA

RAJASTHAN

GUJARAT

UTTARPRADESH

JHARKHAND

BIHAR

MADHYAPRADESH

MAHARASHTRA

ORISSA

KARNATAKA

KERALA

TAMILNADU

ANDHRAPRADESH

CHATTISGARH

ASSAM

Our Presence

To be Penetrated

Regional Office

Training Centers

Our Presence

10

10 11

Notice of Annual General Meeting

Notice is hereby given that the TWENTY FIFTH ANNUAL GENERAL MEETING OF ATUL AUTO LIMITED will be held at Survey No. 86, Plot No. 1 to 4, National Highway 8-B, Near Microwave Tower, Village Shapar (Veraval), Kotda Sangani, Dist. Rajkot – 360 024, Gujarat on Tuesday, 16th July, 2013 at 11.00 A. M. to transact the following businesses:

Ordinary Business:1. To receive, consider and adopt the audited Balance Sheet as at 31st March, 2013, Statement of Profit & Loss

for the year ended on that date together with Report of Directors and Auditors’ thereon.

2. To confirm the final dividend of Rs. 6 per equity share for the year ended 31st March, 2013.

3. To appoint director in place of Shri Mahendra J Patel, who is liable to retire by rotation and being eligible, offers himself for reappointment.

4. To appoint director in place of Shri Niraj J Chandra, who is liable to retire by rotation and being eligible, offers himself for reappointment.

5. To Appoint M/s. Maharishi & Co, Chartered Accountants as statutory auditors of the Company and fix their remuneration.

“RESOLVED THAT M/s. Maharishi & Co, Chartered Accountants (ICAI Registration No. 124872W), be and are hereby appointed as Auditors of the Company, to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting of the Company on such remuneration as shall be fixed by the Board of Directors.”

Special Business:6. To pass, with or without modification, the following Resolution as an Ordinary resolution:

“RESOLVED THAT in accordance with provisions of Section 257 and other applicable provisions, if any, of the Companies Act, 1956, CA S T Shah, who was appointed as an additional director by the Board, and is eligible for appointment as director and in respect of whom notice under Section 257 of the Companies Act, 1956 has been received, be and is hereby appointed as Director of the Company and he shall be liable to retire by rotation as per provisions of the Companies Act, 1956 read with Articles of Association of the Company.”

“RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all things, deeds, acts as may be necessary in this regard.”

7. To pass, with or without modification, the following Resolution as an Ordinary resolution:

“RESOLVED THAT in accordance with provisions of Section 257 and other applicable provisions, if any, of the Companies Act, 1956, CA Hemantkumar J Bhatt, who was appointed as an additional director by the Board, and is eligible for appointment as director and in respect of whom notice under Section 257 of the Companies Act, 1956, has been received, be and is hereby appointed as Director of the Company and he shall be liable to retire by rotation as per provisions of the Companies Act, 1956 read with Articles of Association of the Company.”


8. To pass, with or without modification, the following Resolution as an Ordinary resolution:

“RESOLVED THAT in accordance with provisions of Section 257 and other applicable provisions, if any, of the Companies Act, 1956, Hasmukh H Adhvaryoo, who was appointed as an additional director by the Board, and is eligible for appointment as director and in respect of whom notice under Section 257 of the Companies Act, 1956, has been received, be and is hereby appointed as Director of the Company and he shall be liable to retire by rotation as per provisions of the Companies Act, 1956 read with Articles of Association of the Company.”


9. To pass, with or without modification, the following Resolution as a Special Resolution:

“RESOLVED THAT in accordance with provision of section 198, 269, 309, 310, 311 read with Schedule XIII to the Companies Act, 1956 as well as in accordance with provisions as contained in the Memorandum and Articles of Association of the Company and in pursuance of recommendations of the Remuneration Committee of the Board of Directors of the Company, the approval of the Members be and is hereby given for

12

reappointment of Shri J J Chandra, as the Chairman & Managing Director w.e.f. 1st April, 2013 for the period of Three Years on such terms and conditions mentioned herein under and Shri J J Chandra shall be liable to retire by rotation”

SALARY:

a) Shri J J Chandra be paid remuneration of Rs.5,00,000/- per month w.e.f. 1st April, 2013 to 31st May, 2013 and Rs.6,50,000/- per month w.e.f 1st June, 2013 for the period of one year with authority to the Board of Directors to increase the same from time to time in accordance with limits specified in Schedule XIII to the Companies Act, 1956 as amended from time to time.

b) Other Perquisites:

(i) The Company shall provide him with a Car together with a driver in accordance with the Company policy.

(ii) The Company shall reimburse reasonable medical cost incurred by him, his wife and children either directly or through appropriate insurance.

(iii) The Company shall make available to him telephone facility at his residence including cell phone to be used for the purposes of the business.

“RESOLVED FURTHER THAT the Board shall have discretion, authority to modify forgoing terms and remuneration within the limit prescribed under Schedule XIII of the Companies Act, 1956.

“RESOLVED FURTHER THAT Shri J J Chandra shall not be entitled to any sitting fees for attending meetings of the Board and / or Committee of Directors.

“RESOLVED FURTHER THAT notwithstanding anything to contrary herein contained, where in any financial year during the currency of tenure of Shri J J Chandra, the Company has no profits or has inadequate profits, the Company will pay remuneration by way of salary, incentive remuneration, perquisites and allowances as specified above.”



“RESOLVED THAT in accordance with provision of section 198, 269, 309, 310, 311 read with Schedule XIII to the Companies Act, 1956 as well as in accordance with provision as contained in the Memorandum and Articles of Association of the Company and in pursuance of recommendations of the Remuneration Committee of the Board of Directors of the Company, the approval of the Members be and is hereby given for reappointment of Shri Mahendra J Patel, as the Whole time Director w.e.f. 1st April, 2013 for the period of Three Years on such terms and conditions mentioned herein under and Shri Mahendra J Patel, shall be liable to retire by rotation”

SALARY:

a) Shri Mahendra J Patel be paid remuneration of Rs.4,50,000/- per month w.e.f 1st April, 2013 to 31st May, 2013 and Rs. 5,75,000/- per month w.e.f 1st June, 2013 for the period of one year with authority to the Board of Directors to increase the same from time to time in accordance with limits specified in Schedule XIII to the Companies Act, 1956, as amended from time to time.


(i) The Company shall provide him with a Car together with a driver in accordance with the Company policy.

(ii) The Company shall reimburse reasonable medical cost incurred by him, his wife and children either directly or through appropriate insurance.


“RESOLVED FURTHER THAT the Board shall have discretion, authority to modify forgoing terms and remuneration subject to provisions of Section 198, 269, 309, 310, 311 read with Schedule XIII to the Companies Act, 1956”

“RESOLVED FURTHER THAT Shri Mahendra J Patel shall not be entitled to any sitting fees for attending meetings of the Board and / or Committee of directors”

12 13

“RESOLVED FURTHER THAT notwithstanding anything to contrary herein contained where in any financial year during the currency of tenure of Shri Mahendra J Patel, the Company has no profits or has inadequate profits, the Company will pay remuneration by way of salary, incentive remuneration, perquisites and allowances as specified above, subject to provisions of Schedule XIII to the Companies Act, 1956”



“RESOLVED THAT in accordance with provision of section 198, 269, 309, 310, 311 read with Schedule XIII to the Companies Act, 1956 as well as in accordance with provision as contained in the Memorandum and Articles of Association of the Company and in pursuance of recommendations of the Remuneration Committee of the Board of Directors of the Company, the approval of the Members be and is hereby given for revision of remuneration of Shri Niraj J Chandra, Whole time Director w.e.f. 1st June, 2013, for the period of One Year on such terms and conditions mentioned herein under:”

SALARY:

a) Rs. 2,50,000/- per month till the remaining tenure with authority to the Board of Directors to increase the same from time to time in accordance with limits specified in Schedule XIII to the Companies Act, 1956, as amended from time to time.


(i) A car the Company shall provide him with a Car together with a driver in accordance with the Company policy

(ii) The Company shall reimburse reasonable medical cost incurred by him , his wife and children either directly or through appropriate insurance


“RESOLVED FURTHER THAT the Board shall have discretion, authority to modify forgoing terms, and remuneration within the limit prescribed under Schedule XIII of the Companies Act, 1956.”

“RESOLVED FURTHER THAT Shri Niraj J Chandra, shall not be entitled to any sitting fees for attending meetings of the Board and / or Committee of Director”

“RESOLVED FURTHER THAT notwithstanding anything to contrary herein contained, where in any financial year during the currency of tenure of Shri Niraj J Chandra, the Company has no profits or has inadequate profits, the Company will pay remuneration by way of salary, incentive remuneration, perquisites and allowances as specified above.”


By order of the Board of Directors

For Atul Auto Limited

J J Chandra

Chairman & Managing Director

On 18th May, 2013 at Shapar (Dist. Rajkot)

14

Important Notes:1. The register of Members and the share transfer books of the company will remain closed from 8th July,

2013 to 15th July, 2013 (inclusive of both days) for the purpose of payment of dividend and Annual General Meeting.

2. The Explanatory Statement pursuant to section 173(2) of the Companies Act, 1956 which set out details relating to special business at the meeting, is annexed hereto.

3. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE ON POLL ON HIS/HER BEHALF. SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY.

The instrument of proxy in order to be effective should be deposited at the registered office of the Company, duly completed and signed, not later than 48 hours before the commencement of the meeting. A proxy form is sent herewith. Proxies submitted on behalf of the companies, societies etc. must be supported by an appropriate resolution/authority, as applicable.

4. Member holding shares in electronic form are hereby informed that bank particulars registered against their respective depository accounts will be used by the company for payment of dividend. The company or its Registrar cannot act on any request received directly from the members holding shares in electronic form for any change of bank particulars or bank mandates. Such charges are to be advised only to the Depository participant of the member. Members holding shares in physical form and desirous of either registering bank particulars or changing bank particulars already registered against their respective folios for payment of dividend are requested

5. Under section 205 A of the companies Act, 1956, the amount of dividend remaining unpaid or unclaimed for a period of seven years from the due date is required to be transferred to the Investor Education and Protection Fund (IEPF), constituted by the Central Government.

The Ministry of Corporate Affairs (MCA) on 10th May, 2012 notified the IEPF (Uploading of information regarding unpaid and unclaimed amount lying with Companies) Rules, 2012 (IEPF Rules). The Objective of the IEPF Rules is to help the shareholders ascertain status of the unclaimed amount and overcome the problem due to misplacement of intimation thereof by post etc. The Company has uploaded the information in respect of the Unclaimed dividend in respect of the financial year 2005-06 to 2010-11 as on date of the 24th Annual General Meeting (AGM) held on 26th June, 2012, on the website of the company viz. www.atulauto.co.in

6. To prevent fraudulent transactions, members are advised to exercise due diligence and notify the company of the change in address or demise of any member as soon as possible. Members are also adviseed not to leave their demat account(s) dormant for long. Periodic statement of holdings should be obtained from the concerned Depository Participant and holdings should be verified.

7. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested to submit the PAN to their Depository Participants with whom they are maintaining their Demat accounts. Members holding shares in physical form can submit their PAN details to the Company.

8. Details under clause 49 of the Listing Agreement with the stock Exchange in respect of the directors seeking appointment/reappointment at the Annual General Meeting, is separately annexed hereto. The Directors seeking appointment/reappointment have furnished the declaration under the Companies (Disqualification of Directors under section 274(1)(g) of the companies Act, 1956) Rules, 2003

9. The Notice of 25th Annual General Meeting of the Company along with printed attendance slip is being dispatched to all Members. Electronic copy of the Annual Report for 2012-13 is being sent to all the members whose email address is registered with the Company/Depository Participants unless any member has requested for a hard copy of the same. Members who have not yet registered their email address are encouraged to submit their request with their respective depository participant or the Company, as the case may be.

Members may also note that the notice of the 25th Annual General Meeting and the Annual Report for 2012-13 will also be available on the Company’s Website: www.atulauto.co.in for their download. The physical copies of the aforesaid documents will also be available at the Company’s registered office for inspection during business hours. Even after registering for e-communication, members are entitled to receive such communication in physical form, upon receipt of request for the same, by post free of cost.

14 15

EXPLANATORY STATEMENT PURSUANT TO PROVISIONS OF SECTION 173 (2) OF THE COMPANIES ACT, 1956

Item No. 6, 7 & 8The Board of Directors of the Company had appointed CA S T Shah, as an Additional Director of the Company with effect from 10th November, 2012 whereas, Hasmukh H Adhvaryoo and CA Hemantkumar J Bhatt had been appointed as Additional Directors by the Board w.e.f. 27th December, 2012, pursuant to Section 260 of the Act read with Article 135 of the Articles of Association of the Company. CA S T Shah, Hasmukh H Adhvaryoo and CA Hemantkumar J Bhatt are eminent experts of their respective field and all three are Independent Directors of the Company.

Members are aware about the various comprehensive & regulatory reforms taken by the Central Government in FDI, Company Law, Banking Laws and other sectors since last couple of months. Moreover, there are some other reforms lying in the agenda which are to be implemented by the Government in near future. The need of time is that the Board will have to remain rationalized guided by team of experts of various fields and led by profound industrialists. The Company has also applied to the Nation Stock Exchange (NSE) for listing its securities in addition to existing listing at BSE. Hence, it would be advisable to induct experts who can advise the Board in taking various strategic decisions.

CA S T Shah, a Chartered Accountant by qualification and a renowned management consultant, having experience of more than four decades. CA Hemantkumar J Bhatt, is a renowned Corporate Strategist, a Chartered Accountant by qualification and an excellence of Financial Consulting, Fund Syndication, Risk Management, Corporate Governance and Auditing. Whereas Hasmukh H Adhvaryoo is an expert of Human Resource Development, Personnel Management and General Administration having rich knowledge and experience of more than four and half decades in Government, Semi-Government and Private Sectors.

Under Section 260 of the Company Act, CA S T Shah, Hasmukh H Adhvaryoo and CA Hemantkumar J Bhatt cease to hold office at this Annual General Meeting but are eligible for appointment as Director. A separate notice for each of these Directors under Section 257 of Act has been received from a Member signifying his intention to propose their appointment as Directors.

Members are requested to appoint CA S T Shah, Hasmukh H Adhvaryoo and CA Hemantkumar J Bhatt as Directors of the Company.

None of the Directors, except CA S T Shah, Hasmukh H Adhvaryoo and CA Hemantkumar J Bhatt, being proposed appointees, is anyway interested in the Resolution.

Item No. 9The Board of Directors of the Company had reappointed Shri J J Chandra as Chairman & Managing Director of the Company with effect from 1st April 2013 for the period of three years subject to approval of Members in the Annual General Meeting. Further, the Board had also revised Remuneration of Shri J J Chandra w.e.f. 1st June, 2013, subject to approval of Members. Shri J J Chandra is one of the founder promoters of the Company and is associated with the Company since its inception. Shri J J Chandra has, through his foresight and visionary approach, coupled with sound understanding of the automobile industry, has led the Company to the path of growth.

The remuneration, which is proposed in the Resolution, is in consonance with the remuneration being paid by Companies of similar size in the Industry with respect to experience of the appointee. Further, details such as financial performance, export performance of the Company, components of the remuneration package of Directors, are given in Directors’ Report as well as Report on Corporate Governance.

This may be treated as an abstract of the terms and conditions for increase in remuneration of Shri J J Chandra, as the Chairman & Managing Director, and this is to be treated as an abstract under Section 302 of the Companies Act, 1956.

The Directors recommend the resolution at item 9 of the accompanying notice for approval of the Members of Company, by passing the Resolution as a Special Resolution.

Except Shri J J Chandra, being the proposed beneficiary and Shri Niraj J Chandra, being son of Shri J J Chandra, no other director of the company is concerned and/or interested in this Resolution.

Item No. 10The Board of Directors of the Company had reappointed Shri Mahendra J Patel, as Whole time Director of the Company, with effect from 1st April 2013, for the period of three years subject to approval of Members in the

16

Annual General Meeting. Further, the Board had also revised Remuneration of Shri Mahendra J Patel w.e.f. 1st June, 2013, subject to approval of Members. Shri Mahendra J Patel has been associated with the Company since long. Shri Mahendra J Patel is supervising the production facility of the Company and has great management skill. The Company has benefited a lot from the expertise and vision of Shri Mahendra J Patel.

The remuneration which is proposed in the Resolution is in consonance with the remuneration being paid by Companies of similar size in the Industry with respect to experience of the appointee. Further, details such as financial performance, export performance of the Company, components of the remuneration package of Directors, are given in Directors’ Report as well as Report on Corporate Governance.

This may be treated as an abstract of the terms and conditions for increase in remuneration of Shri Mahendra J Patel , as the Whole time Director and this is to be treated as an abstract under Section 302 of the Companies Act, 1956.


Except Shri Mahendra J Patel, being the proposed beneficiary, no other director of the company, is concerned and/or interested in this Resolution.

Item No. 11The Board of Directors of the Company had revised Remuneration of Shri Niraj J Chandra, Whole time Director, w.e.f. 1st June, 2013, subject to approval of Members. Shri Niraj J Chandra is looking after marketing, production and general administration department of the Company. He has experience on marketing strategies. He has studied in Nirma institute of Technical Studies in mechanical engineering. The remuneration which is proposed in the Resolution, is in consonance with the remuneration being paid by Companies of similar size in the Industry with respect to experience of the appointee. Further, details such as financial performance, export performance of the Company, components of the remuneration package of Directors, are given in Directors’ Report as well as Report on Corporate Governance.

This may be treated as an abstract of the terms and conditions for increase in remuneration of Shri Niraj J Chandra, as the Whole time Director, and this is to be treated as an abstract under Section 302 of the Companies Act, 1956.


Except Shri Niraj J Chandra being the proposed beneficiary, and Shri J J Chandra, being father of Shri Niraj J Chandra, no other director of the company, is concerned and/or interested in this Resolution.

By order of the Board of Directors

For Atul Auto Limited

J J Chandra



16 17

Directors’ Report

Dear Members,

We are delighted to present the report on our business and operations for the year ended on March 31, 2013.

1. Financial Results

Particulars 2013 2012

Revenue from Operations 36,384 29,882

Cost of materials consumed 28,315 24,186

Changes in inventories of finished goods work-in-progress 74 -430

Margin 7,994 6,126

Employee benefits expense 2,101 1,660

Other expenses

- Manufacturing Expense 368 474

- Selling and distribution Expense 1,087 899

- General Admin Expense 430 339

Operating Profit before interest, depreciation, taxes and amortization (PBIDTA)

4,008 2,754

Finance costs 40 76

Depreciation and amortization expense 444 426

Operating Profit Before Tax 3,524 2,252

Other Income 198 59

Net Profit before tax and exceptional item 3,722 2,311

Provision for Taxation 1,130 765

Net Profit after tax and before exceptional item 2,592 1,546

Exceptional Item 0 13

Net Profit after tax and exceptional item 2,592 1,559

Profit and loss account balance brought forward 3,696 2,718

Proposed Dividend 658 366

Tax on Proposed Dividend 112 59

Amount transfer to general reserve 259 156

Balance in Profit and loss account 5,259 3,696

Earnings per equity share

Basic & Diluted - Before Bonus 35.44 24.77

Basic & Diluted - After Bonus 23.62 16.51

2. Dividend Based on the company’s performance, the directors are pleased to recommend for the approval of the

members a final dividend of Rs.6 per share for the financial year 2012-13 (previous year Rs.5 per share) on the capital of 1,09,71,600 equity shares of Rs.10 each. The total cash outflow on account of dividend is Rs..770 lacs, as against Rs.425 lacs in the previous year. The dividend for the year includes Rs.112 lacs Dividend Distribution Tax, as compared to last year of Rs.59 lacs. The company adheres to proclaimed policy of distributing 25% of distributable profits to the shareholders.

3. Transfer to Reserve The company Proposed to transfer Rs.259 lacs to the general reserve out of the amount available for

appropriation and an amount of Rs.5,259 lacs is proposed to be retained in the statement of profit and loss.

(Rs. in lacs)

18

4. Business Company’s total income increased to Rs.36,384 lacs from Rs. 29,882 lacs in the previous year, at a growth

rate of 21.76% and No. of Vehicles sold during the year increased from 27,000 to 32,040 indicated growth of 18.67%.

Gross profit of vehicle sales amounted to Rs.6,363 lacs (17.49% of the revenue) as against Rs.4,662 lacs (15.60% of revenue) in the last year. The operating Profit Before Interest, Depreciation, Taxes and Amortization (PBIDTA) amounted to Rs.4,008 lacs (11.02% of revenue) as against Rs. 2,754 lacs (9.21% of revenue) in the previous year. Sale and marketing cost were 2.99% and 3.01% of our revenue for the year ended March 31, 2013 and March 31, 2012, respectively. Administration expenses were 1.01% and 1.59% of our revenues during the current year and previous year, respectively and General admin expenses were 1.18% and 1.13% of our revenue for the year ended march 31, 2103 and March 31, 2012. The net profit after tax before exceptional item was Rs. 2,592 lacs (7.12% of revenue) as against Rs. 1,546 lacs (5.17% of revenue) in the previous year.

5. Products Company manufactures 3 – Wheelers in India in the sub 1 tonne category targeting the passenger segment

and cargo segment. In passenger segment, the company manufactures the diesel powered carrier for carrying 3 to 6 passengers and also the CNG, LPG and Petrol driven vehicle. In cargo segment, the company manufactures vehicles with a rated carrying capacity of up to 0.50 tonne. Both these vehicles have been approved by the Automotive Research Association of India. It also provides customized vehicles like tippers, hydraulic hoppers, vegetable vending vans etc. The vehicles find wide application in courier services, industrial products, laundry construction, dairies, caterers, FMCG distribution, LPG distribution etc.

Company produces auto rickshaw under Atul Shakti, Atul Smart, Atul Gem and Atul Gemini-DZ product names.

Products:

The company’s existing products are various types of Front Engine & Rear Engine Three wheelers under the brand name “Atul Shakti”, “Atul Gem” “Atul Smart” & “Atul Gemini –Dz”.

The broad categories of the Products are as follow:

1. Goods Carriers

2. Passengers Carriers

3. Special Purpose Vehicle

a) Chicken Carrier

b) Tripper

c) Water Tank Carrier

d) Soft Drink Carrier

e) Mobile Shop

f) Hopper

g) Bio Hazard

h) Vegetable vending

Atul Shakti, Atul Gem & Atul Smart (Loading)

It is suitable for transportation of small volumes of cargo from transit station to main offices and vice versa. It has a capacity of 500 kgs and is fitted with 7.5 HP, 4 Stroke air cooled engine. It has distinct advantages over the other pick up vans, which have mostly petrol engines. Other unique features of the vehicle include auto ignition start, fuel efficiency etc. The company has introduced different types of vehicle to cater to the specific demand of the customers like Pack Body Vehicles, Soft Drink Carrier, High Deck, Chicken Carrier, Hydraulic Tipper, Ice – Cream shop, Hopper, Water tank carrier and Open Box type body etc.

Atul Shakti, Atul Gem, Atul Smart & Atul Gemini-Dz (Passenger Rickshaw)

This vehicle has an approved capacity to carry 3 passengers (excluding driver) or in terms of pay load capacity it can carry 500 kgs and in case of Gemini-Dz can carry 253 kgs. The vehicle is fitted with 7.5 HP, 4 strokes air cooled diesel engine having handle bar, auto start and dry clutch facilities.

18 19

6. Quality Initiative To optimize the customer satisfaction, the Company continues to intensify its drive to improve quality and

product offering while maintaining its low cost product development/sourcing advantage.

7. Capital Expenditure The Company incurred a capital expenditure of Rs. 960 lacs( Rs. 847 lacs in the previous year). The entire

capital expenditure was funded out of internal accruals.

During the year, the Company capitalized Rs. 760 lacs to gross block of Tangible Fixed Assets comprising Rs.219 lacs for investment in building, Rs.477 lacs on plant & machinery, Rs.11 lacs on furniture & fixtures and Rs.29 lacs on vehicles and Rs.24 lacs in office equipments.

Last year, the Company added Rs.287 lacs to the gross block of Tangible Fixed Assets, including investment in Rs.14 lacs for investment in building, Rs.160 lacs on plant & machinery, Rs.5 lacs on furniture & fixtures and Rs.67 lacs on vehicles and Rs.41 lacs office equipment.

8. Liquidity The company does not have any long term borrowings and any long term and short term borrowings at

the end of the financial year. We clearly understand that the liquidity in the Balance sheet has to balance between earning adequate returns and the need to cover financial and business risk. Liquidity also enables us to make a rapid shift in direction, should the market so demand. During fiscal 2013, internal cash flows have more than adequately covered working capital requirements, capital expenditure and dividend payments. As at March 31, 2013, we had liquid assets of Rs.6,981lacs as against Rs.4,926 lacs at the end of previous year – 2011-12. Out of these liquid assets, we have invested Rs. 3,382 lacs in mutual fund to earn dividend.

9. Increase in Share Capital During the year under Report, authorized share capital of the Company had been increased from Rs.800 lacs

divided into 80 lacs equity shares of Rs. 10/- each to Rs. 1,500 lacs divided into 150 lacs equity shares of Rs. 10/- each. Further, the Company had issued & allotted 36,57,200 equity shares of Rs. 10/- fully paid up as Bonus shares in ratio of one share for every two shares held by the members of the Company on book closure date (i.e 5th July, 2012).

10. Application to the National Stock Exchange Ltd (NSE) for listing of securities of the Company In month of November, 2012, the Company had made application for listing of its securities in the National

Stock Exchange Ltd, Mumbai, and the approval is pending as on 31st March, 2013. This will be an additional listing of securities apart from current listing on the BSE Ltd. On listing at NSE, investors will have one more platform for liquidity of securities of the Company.

11. Corporate Governance As per clause 49 of the Listing Agreements entered into with the stock exchange, corporate governance

Report with Auditors’ Certificate thereon and a Management discussion and analysis Report are attached and form part of this Report.

12. Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo The particulars as prescribed under sub-section (1)(e) of section 217 of the Companies Act, 1956, read with

the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, are provided in the Annexure to this Report.

13. Particulars of Employees In terms of the provisions of the section 217(2A) of the companies Act,1956, read with the companies

(Particulars of employees) Rule, 1975 as amended, the names and other particulars of the employees are required to be set out in the Directors Report. Having regard to the provisions of section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

20

14. Directors’ responsibility statement as required under Section 217 (2AA) of the Companies Act, 1956 Pursuant to the requirement of Section 217(2AA) of the Act, and based on the representations received from

the operating management, the Directors hereby confirm that:

(i) In the preparation of the annual accounts for the financial year 2012-13, the applicable accounting standards have been followed and there are no material departures;

(ii) They have selected such accounting policies and applied them consistency and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for the financial year;

(iii) They have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) They have prepared annual accounts on a going concern basis.

15. Directors CA S T Shah was appointed as an additional Director w.e.f. 10th November, 2012 ; CA Hemantkumar J Bhatt

and Hasmukh H Adhvaryoo were also appointed as an additional Director w.e.f. 27th December, 2012.

Mahendra J Patel and Niraj J Chandra, Directors of the company are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

Ramniklal Kotecha resigned from Board w.e.f. 10th November, 2012 and Suresh Kaneria and CA Rajesh Dhruva have resigned from board w.e.f. 27th December, 2012. The board appreciates the efforts put in by them for their contribution.

16. Auditors M/s Maharishi & Co., Chartered Accountants, who are the statutory auditors of the company, hold office, in

accordance with the provisions of the Act till the conclusion of the forthcoming annual general meeting and are eligible for reappointment. M/s Maharishi & Co., Chartered Accountants, has sought the re-appointment and has confirmed that their re-appointment if made shall be within the limits of section 224(1B) of the companies Act, 1956. The audit committee and the board of directors recommended the re-appointment of M/s Maharishi & Co., Chartered Accountants, as the Auditors of the company for the fiscal year ending on March 31, 2014.

17. Cost Auditors The Company has appointed M/s. Ashish Bhavsar & Associates, practising Cost Accountants, for conducting

the cost audit for Financial year 2012-2013.

18. Acknowledgments The directors thank the company’s customers, vendors, investors and bankers for their continued support

during the year. It is unflinching support and hard work put in by employees which made the growth of the company possible, The directors’ put sincere appreciation on record for employees. Company’s consistent growth was made possible by their hard work, solidarity, cooperation and support. The directors also thank the government and Semi Government agencies of Government of India and state governments and approving agency Automotive Research Association of India (ARAI) for their support, and look forward to their continued support in the future.

For and on behalf of the Board

J J Chandra Chairman & Managing Director


20 21

Annexure to the Directors’ ReportParticular pursuant to Companies (Disclosure of particular in the report of the Board of Directors) Rules, 1988a. Conservation of Energy The company has always been conscious of need for conservation of energy. Energy conservation measures

have been implemented at plant and more efforts are continuously made by the company to minimize wastages and reduce the consumption rate of power per unit. Actions of the company have resulted in consumption of units of power per vehicle from 124 units to 107 units. Total Energy consumption and per unit consumption thereof is given in Form A. This year we have reduced energy consumption per vehicle by 13.71%,

Form A

Particulars 2012-13 2011-12

Electricity Purchased

Units 34,36,900 34,13,060

Amount Rs. 2,37,35,367 2,14,83,276

Rate Per Unit 6.91 6.29

Production in No. 32013 27563

Unit consumed per unit of production 107 124

It includes utilization of own generated electricity units 12,45,430 (previous year 12,91,748 ) form WTG in Gujarat.

b. Research and Development (R&D) The company has R & D centre at Pune. The centre is aiming at regular up-gradation of vehicles produced by

the company through absorption of latest technology coupled with strategic engineering skill. Company has incurred following expenditure on R&D.

(Rs. in lacs)


Revenue expenditure 8.03 2.21

Capital expenditure Nil Nil

Total 8.03 2.21

c. Future Plan of Action In the future, we will continue following more innovative, environment-friendly and practical automobile

vehicles considering changes in market trends.

d. Foreign Exchange Earnings and Outgo Activity relating to exports, initiatives taken to increase exports, development of new export plans. During

the year, 0.87% of our revenues were derived from exports. Company is in process of establishing direct marketing network around the prospective geographies. Foreign exchange earnings and outgoes are as under

(Rs. in lacs)


Earning 338 265

Expenditure 28 25

Net foreign exchange Earning (NFE) 310 240

NFE/Earning (%) 91.7 90.6

For and on behalf of the Board

J J Chandra



22

The financial statements have been prepared in compliance with the requirements of the Companies Act, 1956, guidelines issued by the Securities and Exchange Board of India (SEBI) and the Generally Accepted Accounting Principles (GAAP) in India. Our management accepts responsibility for the integrity and objectivity of these financial statements, as well as for the various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, so that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present our state of affairs, profit and cash flows for the year.

A. Economy And Industry Overview The global economic environment in calendar year 2012 continued to remain uncertain with signs of concern

and slow growth (1%-2%). Improving consumer confidence and structural policy decisions in the developed markets are providing the required momentum to kick-start the economy on to the path of recovery. In the emerging markets, strong consumer spending and upbeat investment sentiments continue to drive economic growth (5%-8%). Across markets, technology and innovation are being seen as growth drivers. Investment in innovation has emerged as a differentiator in the market place. Investment in technology has been enabling companies to connect with customers and influence their purchase decisions on a real time basis.

B. Industry Structure and Developments Company is in the business of manufacturing three wheelers in passenger and goods carrier segment, in

particular 0.5 T carrying capacity three wheelers.Domestic three wheeler market is now divided in two segments, i.e. 0.35 T three wheeler and 0.5 T three wheeler. While contribution of 0.5 T three wheeler in domestic market is above 50 %, the consumption for export market is catered by 0.35 T three wheelers.

Changing economic and business conditions, evolving consumer preference, rapid technological innovation and adoption, and globalization are driving corporation to transform the manner in which they operate. Companies are now more focused on their core business objectives, such as revenue growth, profitability and asset efficiency and new product development in three wheeler segment. GDP of the country is expected to grow at 5% for financial year 2013-14 and with good monsoon; GDP in agricultural sector is expected to grow by 1.2%. However, there are serious concerns in short term industrial outlook and industry is slowing down. As the inflation has also remained very high at steep increase in fuel prices will result in lower spending for purchase of goods across the industries. The automobile industry cannot remain isolated. It is further expected that the industrial output growth is likely to remain subdued in first half of 2013-14 owing to tighter monetary policies and weak external demand. Moderation in industrial production, rise in interest rates, fuel prices and other transporter cost is pressurizing profitability of fleet operators and is consequently expected to lead to lower CV demand for FY 2013 & FY 2014, after 2 years of strong growth. With cues of poor global economic scenario, the GDP of India is also expected to fall in current year at 5% in FY 2013-14. Industrial Manufacturing growth rate is negative in quarter 1 of F.Y. 2012-13 i.e. -0.84%, however the same is increased in the quarter 2 and quarter 3 of the same financial year i.e. 0.25% and 2.61% respectively.

The goods segment is linked to overall economic growth, as transportation is associated with all the sectors of the economy and hence, the company is more vulnerable to a slowdown in the economy as against other diversified competitors. Demand for commercial vehicles is cyclical as it is driven by various factors such as growth in industrial and agricultural production, freight movement, share of roads in freight movement, changes in freight rates and fuel prices, profitability of transporters and changes in government policies. CV sales have risen and fallen alternately, in line with macroeconomic indicators over the past decade and a half, which is also reflected from the correlation of freight movement with GDP (industrial and agricultural), which is significantly high at over 0.95 from 1970-71 to 2011-12.

Furthermore, three- wheeler sales have been lacklustre since sub-one tonne vehicles crowded them out in 2005-06 in domestic market. A higher load-carrying capacity and better cost economics, besides comfort and maneuverability have driven transporter preference for sub-one tonne vehicles over large three-wheeler, which had been used for last-mile applications until then. Contribution of three wheeler of the total small goods vehicles segment (LCV + three-wheeler) has reduced to around 35 percent in 2011-12, from 69 percent during 2004-05. Research Companies estimates the three wheeler segment contribution to decline to around 16 percent of the total small goods segment by 2016-17. Although sub-one tonne vehicles have not affected sales of small three wheeler as much as large three-wheeler, Researchers believes that company’s product demand will remain prone to any significant technological innovation or launch of new models with better cost advantage in sub-one / micro truck category.

Management Discussion & Analysis

22 23

C. Automobile Industry and Trends Industry Development in 3 wheeler segments for the year 12-13 as compared to year 11-12 is as follows:

CategoryDomestic Sales Exports

2011-12 2012-13 % Change 2011-12 2012-13 % Change

Passenger Carrier 4,06,260 4,41,118 8.58 3,59,613 3,00,473 -16.45

Goods Carrier 1,07,021 97,173 -9.20 2,140 2,615 22.20

Total Three Wheelers 5,13,281 5,38,291 4.87 3,61,753 3,03,088 -16.22

(Source: SIAM Report for the month of March 2013)

The factors such as income growth, consumer confidence, finance availability, increase in commodity prices and stiffening has continued to impact on automobile industry across the sector this year also. The overall growth in various segments of automobiles has started showing negative trends from the second quarter of the FY 2012-13. However in three wheeler segment the growth in domestic market is miniscule and export market is showing serious downturn. As the company is presently catering to domestic market its sales improved substantially mainly because of entry in to newer domestic geographies and increasing dealership network.

For future the outlook for the company products are forecast by SIAM as under:-

SegmentsReview Growth Forecast Range

Volume ('000) Growth (%) CRISIL Forecast (%)

Delphi Response (%)

Forecast Volume(‘000)

FY12 FY13 FY13 FY14P FY14P(Avg.) FY14P FY14P

Goods 107 97 -9% 2 to 4% 4% 2 to 4% 99 TO 101

Passengers 406 443 9% 3 to 5% 4% 3 to 5% 456 TO 465

Total Three Wheelers 513 540 5% 3 to 5% 4% 3 to 5% 557 TO 567

P: Projected, Number of Delphi responses: 2 , Source: SIAM, CRISIL Research

D. Evaluation of technology Consciousness of regulator and environment awareness of the consumers coupled with impending rise

of diesel prices. The industries may also look at ecofriendly vehicles like CNG& LPG based three vehicles. Psychology of domestic users towards minimum cost per km for fuel and maintenancewould be the driving factors in this market.

E. Financial Condition

Sources of funds

1. Share CapitalAt present, we have only one class of shares – equity shares of par value Rs. 10/- each. Our authorized share capital is Rs.1500 lacs, divided into 150 lacs equity share of Rs. 10/- each. The subscribed and paid up capital stood at Rs.1097 lacs at the March 31, 2013, compared to Rs.731 lacs at March 31, 2012.

During the year, company has issued bonus shares of Rs.10/- each in the ratio 2:1 as on July 6, 2012. Total no. of bonus shares issued were 36,57,200 Equity shares. These shares are listed & available for trading at BSE Limited.

2. Reserves and Surplus

Capital ReserveThe balance as at March 31, 2013 amounted to Rs. 30 lacs, same as the previous year.

Securities PremiumThere is no addition to the securities premium account during the year. However for the issue of 36,57,200 bonus share of Rs.10 each amounting to Rs. 366 lacs is utilized from the security premium. Therefore, at the end after utilizing premium for bonus closing balance in security premium is Rs. 478 lacs.

24

General ReserveAn amount of Rs.259 lacs representing 10% of the net profit for the year ended March 31, 2013 (previous year Rs.156 lacs) was transferred to the general reserves account from the Statement of Profit & Loss.

Profit and Loss AccountThe balance retained in the Profit and Loss account as at March 31, 2013 is Rs.5,259 lacs, after providing the proposed dividend Rs.658 lacs and dividend tax of Rs.112 lacs thereon. The total amount of profit appropriated to dividend including dividend tax was Rs.770 lacs, as compared to Rs.425 lacs in the previous year.

Shareholders’ fundsThe total shareholder funds increased to Rs.7,430 lacs as at March 31, 2013 form Rs.5,609 lacs as of the previous year end.

The book value per share increased to Rs.68 as at March 31, 2013, compared to Rs.51 (After Bonus) as of the previous year end.

Application of Funds

3. Fixed assets

Capital ExpenditureWe incurred a capital expenditure of Rs. 960 lacs (Rs. 847 lacs in the previous year). The entire capital expenditure was funded out of internal accruals.

Addition to gross blockDuring the year, we capitalized Rs. 760 lacs to our gross block of Tangible Fixed Assets comprising Rs. 219 lacs for investment in building, Rs. 477 lacs on plant & machinery, Rs. 11 lacs on furniture & fixtures and Rs. 29 lacs on vehicles and 24 lacs in office equipments.

Last year, we added Rs. 287 lacs to our gross block of Tangible Fixed Assets, including investment in Rs. 14 lacs for investment in building, Rs. 160 lacs on plant & machinery, Rs. 5 lacs on furniture & fixtures and Rs. 67 lacs on vehicles and 41 lacs office equipment.

Deductions to Gross BlockDuring the year, we deducted Rs.10 lacs form the gross block on disposal of assets. During the previous year, we retired/disposed various assets with the gross block of Rs.560 lacs.

Capital Expenditure CommitmentsWe have a capital expenditure commitment of Rs. 143 lacs as at March 31, 2013 as compared to Rs.853 lacs as at March 31, 2012.

4. InvestmentsOur investments includes, investment held in associated company Khushbu Auto Finance Limited of Rs. 230 lacs which represent 49% holding in the company. In the previous year we depreciated the value of investment by Rs. 107 lacs on account of permanent diminution in the value of share of Khushbu Auto Finance Limited. Our investment also includes current investment made in liquid mutual funds of Rs.3382 lacs

5. Deferred Tax Assets /LiabilitiesWe recorded deferred tax assets of Rs.39 lacs at March 31, 2013 (Rs. 11 lacs as at March 31, 2012 and deferred tax liabilities of Rs. 488 lacs as at March 31, 2013 (Rs.477 lacs as at March 31, 2012).

We assess the likelihood that our deferred tax assets will be recovered from future taxable income. We believe it is more likely than not that we will realize the benefits of these deductible differences.

6. Trade receivablesTrade receivable amounted to Rs.715 lacs as at March 31, 2013, compared to Rs.608 lacs as at March 31, 2012. These debts are considered good and realizable. Debtors are at 1.97% of revenues for the year ended March 31, 2013, compared to 2.03% for the previous year.

24 25

7. Cash and Cash EquivalentsThe bank balances shows various balances held in scheduled banks. Cash and cash equivalents also includes investment in liquid mutual fund having maturity less than 90 days.

8. Loans and Advances

(Rs. in lacs)


Long term loans & advances

Advance for capital goods 254 352

Securities and rent deposits 45 36

Balance with government authority 86 71

Sub-Total 385 459

Short term loans & advances

Advances to suppliers for material 60 131

Advances to suppliers for services 23 12

Advances for other 11 8

Advances to staff 5 5

Expenses paid in advance 29 10

Balance with government authority 28 28

Sub Total 156 194

Total 541 653

Advances are made for capital goods, deposits includes PGVCL deposit, rent deposit and security deposit. Company has paid tax against demand raised and went for future litigation.

9. Liabilities

(Rs. in lacs)


Dealers’ deposits 258 205

Cash credit from IDBI 0 389

Trade payable 2,374 1,568

Unpaid dividend 22 10

Advance form dealers 91 252

Others liabilities

Duties & taxes 313 292

Provision for expenses 59 57

Total 3,117 2,773

Provision for expenses represent amounts accrued for other operational expenses. Duties and taxes payable represent local taxes payable in which we operate and the same will be paid in due

course. Advances received from clients represent monies received for the delivery of future services.

26

10. Provisions (Rs. in lacs)


Proposed Dividend 658 366

Tax on Dividend 112 59

Income Tax 106 164

Leave Salary 76 25

Post-sale Client Support and Warranties 193 141

Wealth Tax Payable 2 3

Gratuity Obligation 90 55

Total 1,237 813

Proposed dividend represents that, we recommended to our shareholders. On approval by our shareholders, this will be paid after the Annual General Meeting (AGM). Provision for tax on dividend denotes taxes payable on final dividend declared for the year. Provisions for taxations represent estimated income tax liability.Provisions for Unavailed leave are towards our liability for leave encashment valued on an actuarial basis. The provision for post – sales client support and warranties is towards likely expenses for providing post sales client support on fixed prices contracts.

F. Results of OperationsThe function wise classification of statement of profit and loss account is as follows:

Particulars 2013 % 2012 %Revenue from Operations 36,384 100.00 29,882 100.00Cost of materials consumed 28,315 77.82 24,186 80.94Changes in inventories of finished goods work-in-progress

74 0.20 -430 -1.44

Margin 7,994 22.18 6,126 19.06Employee benefits expense 2,101 5.77 1,660 5.56Other expenses - Manufacturing Expense 368 1.01 474 1.59- Selling and distribution Expense 1,087 2.99 899 3.01- General Admin Expense 430 1.18 339 1.13Operating Profit before interest, depreciation, taxes and amortization (PBIDTA)

4,008 11.02 2,754 9.21

Finance costs 40 0.11 76 0.26Depreciation and amortization expense 444 1.22 426 1.43Operating Profit Before Tax 3,524 9.69 2,252 7.54Other Income 198 0.54 59 0.20Net Profit before tax and exceptional item

3,722 10.23 2,311 7.73

Provision for Taxation 1,130 3.11 765 2.56Net Profit after tax and before exceptional item

2,592 7.12 1,546 5.17

Exceptional Item 0 0.00 13 0.04

Net Profit after tax and exceptional item 2,592 7.12 1,559 5.22

1. Income

Sale of Vehicles and SparesSales of Vehicles and Spares have been increased by 21.77% to Rs.36,286 lacs for the year March 31, 2013, compared to Rs.29,798 lacs in March, 2012. Company has recorded total sales of 32,040 vehicles as compared to 27,000 vehicles in the previous year.

26 27

Other Operating IncomeOther operating income has been increased to Rs.98 lacs for the year March 31, 2013 for Rs.85 lacs for the year March 31, 2012.

2. Expenditure

Raw Material Consumption & Processing ChargesRaw Material consumption& processing charges increased by 17.08% to Rs.28,315 lacs for the March 31, 2013 form Rs.24,186 lacs for the March 31, 2012.

Employee BenefitsEmployee benefits increased by 26.57% to Rs.2,101 lacs for the year March 31, 2013 from Rs.1,660 lacs for the March 31, 2012.

Finance CostDuring the year finance cost has been decreased by 47.26% toRs.40 lacs compared to Rs.76 lacs in the previous year. It includes other interest of Rs.17 lacs Interest on Income tax Rs.13 lacs, bank charges of Rs.3lacs and other borrowing cost of Rs.7 lacs.

Depreciation & AmortizationWe have provided Rs.390 lacs for depreciation, amortization of intangible asset of Rs.54 lacs during the year.

Tax ExpensesWe have provided provision for current tax Rs.1147 lacs for the year ended March 31, 2013, compared to Rs.840 lacs in the previous year.

Gross ProfitThe gross profit from the vehicle sales during the year was Rs.6,363 lacs representing 17.49% of revenues compared toRs.4,662 lacs representing 15.6% of revenues in the previous year.

Manufacturing ExpensesWe incurred manufacturing expenses at 1.01% of our revenue, compared to 1.59% in the previous year.

Selling and Marketing ExpensesWe incurred selling and marketing expenses at 2.99% of our revenues, compared to 3.01% in the previous year. It includes Rs.144 lacs of finance subvention expenses paid to financial company / bank for finance given to vehicles.

General and Administration ExpenseWe incurred General and administration expenses amounting to 1.18% and 1.13% of our revenues, during the current year and previous year, respectively.

3. Operating ProfitsWe earned an operating profit (PBIDTA) of Rs.4,008 lacs, representing 11.02% of revenues compared to Rs.2,754 lacs, representing 9.22% of revenues, during the previous year.

4. Other IncomeOur treasury policy allows us to invest in short –term instruments with a maturity of up to 90 days, with a limit on individual fund/ bank. The increase in interest income during the year was on account of higher cash generation in the business and increase in the average yield during the year.

5. Provision for TaxWe have provided for our lax liability in India. The Indian statutory corporate tax rate for the year ended March 31, 2013 is 32.445%.

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6. Net Profit After TaxOur net profit increased by 67.66% to Rs.2,592 lacs for the year ended March 31, 2013 from Rs.1,546 lacs in the previous year, excluding exceptional item. This represents 7.12% and 5.17% of revenue for the year ended March 31, 2013 and March 31, 2012 respectively

7. Earnings Per Share (EPS) Before Exceptional ItemOur basic EPS before exceptional item and bonus shares increased by 44.23% during the year to 35.44 per share from 24.57 per share in the previous year. But after issuing bonus share the EPS is 23.62 and 16.51 per share in current year and previous year respectively. The outstanding shares used in computing basic EPS before bonus issue is increased form 62,93,403 for the year ended March 31,2012 to 73,14,400 for the year ended March 31, 2013. However after issuing bonus shares the outstanding share for computing basic EPS is increased from 94,40,105 shares to 1,09,71,600 for the year ended March 31, 2013.

8. LiquidityOur growth has been financed largely through cash generated from operations. The net cash generated from our operations was Rs.4066 lacs and Rs.1,956 lacs for the years ended March 31, 2013 and March 31, 2012, respectively. Net cash provided by / (used in) investing activities was Rs.(956) lacs and Rs.(611) lacs for the year ended March 31, 2013 and March 31, 2012, respectively. Net cash used in financing activities was Rs.442 lacs and Rs.491 lacs for the years ended March 31, 2013 and March 31, 2012, respectively.

9. Related Party Transactions These have been discussed in detail in the Notes to the financial statements section of this report.

10. Events Occurring after the Balance Sheet DateThere were no significant events occurring after the Balance Sheet date.

G. Opportunities and threats

Our strengths• TheCompanyhasbeeninthisbusinessformorethanthreedecades.

• Company’spromotershavehandsonexperienceintheautoindustry.

• Companyhasadedicatedresearch&Developmentteamconstantlyworkingtodevelopmoreefficientvehicles.

• TheCompanyhaslauncheddieselvehicleshavingsubstantialadvantageintermsoffueleconomyoverpetrol driven vehicle.

• ThecompanyhasalsolaunchedNewvehiclecalled‘AtulGemini-Dz’

• ThecompanyisinprocessofdevelopingsmallcarryingcapacityCNG&LPGvehicleswhicharehavinggood demand, looking into cost effectiveness and environment friendly product.

• Companyhasstartedexpandingitsreachtonewmarkets.

• Oncethesmallgasolineandalternativefuelvehiclewillbeinplace,Companywouldcompleterangeofthree wheelers to cater any market segment.

Our StrategyWe strive to shed our image of regional player to national player by penetrating market in various states.

Our Competition We operate in a highly competitive and rapidly changing market and compete with entities who are large players and several other small manufacturers. Company is facing competition from these companies, which is normal in nature.

In the future, we expect an intensified competition from some of them, and may also experience competition from new competitors. In particular, we expect increased competition from firms that strengthen their presence in India bringing advanced technology and foreign collaboration.

28 29

We understand that price alone cannot constitute a sustainable competitive advantage. We believe that the principal competitive factors in our business are the ability to attract and retain high-quality management, technology professionals, and sales personnel; constant innovation and improvement in products , increase the scale and breadth of service offerings to customers PAN India and provide solutions for customer needs; keep pace with ever-changing technology and customer requirements; a strong and well-recognized brand; a proven track record of performance excellence and customer satisfaction; the financial strength to be able to invest in personnel and infrastructure and capacities to support the evolving demands of market; and high ethical and corporate governance standards to ensure honest and professional business practices and protect the reputation of the Company and its customers.

We believe we compete adequately with respect to these factors.

Outlook, risks and concerns

This section contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these statements as a result of certain factors. The following lists our outlook, risks and concerns:

• Ourrevenuesandexpensesaredifficulttopredictandcanvarysignificantlyfromperiodtoperiod,which could cause our share price to decline. We may not be able to sustain our previous profit margins or levels of profitability.

• The economic environment, pricing pressure could negatively affect our revenues and operatingresults.

• Anyinabilitytomanageourgrowthcoulddisruptourbusinessandreduceourprofitability.

• Wemayfacedifficultiesinprocuringrawmaterialatcompetitiveprocessbecauseofoursizecomparedto competitors and therefore may have bore the brunt of fluctuating commodity prices .

• Oursuccessdepends in largepartonourmanagementteamandkeypersonnelandourabilitytoattract and retain them.

• Compliancewithnewandchangingcorporategovernanceandpublicdisclosurerequirementsaddsuncertainty to our compliance policies and increases our costs of compliance.

• Wemayengage inacquisitions,strategic investments,strategicpartnershipsoralliancesorotherventures that may or may not be successful.

• Wemaybe the subject to litigationwhich, if adverselydetermined, couldharmourbusinessandoperating results.

• Wage pressures and the hiring of employees may prevent us from sustaining our competitiveadvantage and may reduce our profit margins.

H. Internal Control Systems and Their AdequacyThe company has a comprehensive system of internal control to safeguard the Company’s assets against the loss from unauthorized use and ensures proper authorization of financial transactions.

The Company has internal control systems commensurate with the size and nature of the business and has experienced personnel positioned adequately in the organization to ensure internal control process and compliances. The Company takes abundant care in designing, reviewing and monitoring regularly the working of internal control systems and internal control compliances for all important financial internal control processes. The Audit findings are reported on quarterly basis to the Audit Committee of the Board headed by a Non-executive Independent Director.

The company has robust ERP systems based on SAP platform. This ensures a high degree of system-based checks and controls. The company maintains a system of internal control designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the reliability of financial controls and compliance with laws and regulations.

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I. Risk Management Analysis

ERM Objectives

The Company has framework for management of its risk. It has led down detail procedure to inform board Member about the Risk assessment and Minimization Procedure. These procedures are reviewed periodically to ensure the executive management control risk through means of proper define framework.

The company has categorized its risk in 6 broad categorized such as:(a) Strategy risk(b) Operational risk(c) Resources risk(d) Industry risk(e) Competition risk(f) The regulatory framework

On the basis of above risk categories the impact of risk is analysis on its following parameters(a) Financial(b) Customers(c) Operation(d) Human resource and leadership

On impact analysis there is a define framework or management of such key risks by(a) Identification and Assessment(b) Monitoring and mitigation(c) Reporting and Disclosure to the board(d) Integration with strategy and business plan

The risk governance structure comprises of board of directors and key management team with advisory function of consultants risk are identified on the corporate level and entity level and accordingly same are refer to respective governance structure.

Risk management during the year Our key ERM practice continuous to focus on minimizing adverse impact on our growth, profitability, efficiency and sustainability. During the year we have carried out periodic Assessment of risk their potential impact on our business and assessment of risk comprising or our key geographic, key suppliers, key external indicators, key products launched by the competitors. We have also periodically reviewed and monitored key development in regulating environment and its impact on our supply chain management. We have also analysis risk involved in capacity on bottlenecks and its impact on growth strategies.

Cautionary StatementStatements in the Management Discussion and Analysis describing the Company’s objective, projections, estimates, expectations may be “forward-looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include, among others, economic conditions affecting demand /supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and incidental facto`

30 31

Our Corporate Governance Philosophy

Corporate governance is about commitment to values and ethical business conduct. At Atul Auto, good corporate governance is intrinsic to the management of company affairs. These values and principles set the context to manage our Company affairs in a fair and transparent manner. As a responsible corporation, these values set the framework to maintain accountability in all our affairs and democratic and open processes.

We believe that sound corporate governance is critical to enhance and retain investor trust. Accordingly, we always seek to ensure that we attain our performance goals with integrity. We also endeavor to enhance long- term shareholders’ value and respect minority rights in all our business decisions. Recognizing that good corporate governance is the responsibility and privilege of every stakeholder of the company, we have involved guidelines and practices over the years to ensure timely and accurate disclosure of information regarding our financials and performance as well as the leadership and governance of the company.

Our corporate governance philosophy is based on the following principles:

• Satisfythespiritofthelawandnotjusttheletterofthelaw.Corporategovernancestandardsshouldgobeyond the law.

• Betransparentandmaintainahighdegreeofdisclosurelevels.WheninDoubt,disclose.

• Makeacleardistinctionbetweenpersonalconveniencesandcorporateresources

• Communicateexternally,inatruthfulmanner,abouthowthecompanyisruninternally

• Haveasimpleandtransparentcorporatestructuredrivensolelybybusinessneeds

• TheManagementisthetrusteeoftheshareholders’capitalandnottheowner

TheBoard of Directors (‘theBoard’) is at the core of our corporate governance practice and oversees how theManagement serves and protects the long term interest of all our stakeholders. We believe that an active, well-informed and independent Board is necessary to ensure the highest standards of corporate governance. It is well recognized that an effective Board of Director is a pre requisite for strong and effective corporate governance. Our Board exercises its fiduciary responsibilities in the widest sense of the term.

In our Board, 8 out of 4 are independent members. Further, we have audit committee, remuneration committee, shareholders grievance committee, which comprises independent directors as chairman.

Corporate Governance Guidelines

Over the years, the Board has developed corporate governance guidelines to fulfill our corporate responsibility towards our stakeholders. These guidelines ensure that the Board will have the necessary authority and processes in place to review and evaluate our operations when required. Further, these guidelines allow the Board to make decisions that are independent of the Management. The Board may change these guidelines from time to time to achieve our stated objectives.

A. Board Composition

Size and composition of the Board

The current policy is to have an appropriate mix of executive and non-executive directors to maintain the independence of the Board and to separate its functions of governance and management. Currently, the Board consists of 8 members: 3 are whole time directors, 1 is non independent & non executive director and 4 are independent and non executive directors.

Two of the executive directors are founder promoters of the Company. The Board believes that the current size is appropriate based on our present circumstances. The Board periodically evaluates the need for change in its composition and size.

Report on Corporate Governance

32

Composition of the Board, and directorships held as at March 31, 2013

Name of the Directors Designation Age Qualification Expertise Other Directorship

Executive Director


58 Under Graduate

Eminent industrialist with wide business experience in Automobile Industry for last 37 year

Nil

Mahendra J Patel Whole time Director 50 Under Graduate

21 years ofT experience in Automobile Industry

Nil

Niraj J Chandra Whole time Director 34 Under Graduate

marketing, production and general administrative skill

Atul Auto Lanka (P) Ltd, Sri Lanka

Non Independent & Non Executive Director

Vijay K Kedia Director 53 B. ComMore than 27 years of experience in the field of Finance & Securities Market.

1. Kedia Securities Pvt. Ltd.2. Three Pl Services Pvt. Ltd.3. Lykis Limited4. Regent Realty Pvt. Ltd.5. Dharam Nagar Tea Estate Private Limited6. Jin-X Marketing Private Limited7. LykisPharma Private Limited

Independent & Non Executive Director

Adv. Hakubhai J Lalakiya Director 58 B.Com. L.L.M. Practicing as advocate for more than 26 years

Nil

CA S T Shah Director 76 B.Com. FCA ACS

Financial Consulting, HR Consulting, General Insurance Consulting & Performance Improvement

1. Vanguard Finance Pvt Ltd

CA Hemantkumar J Bhatt Director 58 FCA, DISA Auditing, Project Consulting, Fund Syndication, Merchant Banking Activities, Financial Consulting, Risk Management, Corporate Governance, Training, Six Sigma, IFRS, XBRL, SOX

Nil

Hasmukh H Adhvaryoo Director 73 B.A. B.Com. Human Resource Management and Administration

Nil

Details of Directorship / Committee Membership or Chairmanship as at March 31, 2013

Name of the Director Designation

No. of shares Held

Directorship in all Public

Limited Companies

Membership in Committee in all Public Limited Companies (Other than Atul Auto Ltd.)

Chairmanship of Committee in all Public Limited

Companies (Other than Atul Auto Ltd.)


8,05,303 Nil Nil Nil

Mahendra J Patel Whole time Director 1,38,924 Nil Nil Nil

Niraj J Chandra Whole time Director 1,42,339 Nil Nil Nil

Vijay K Kedia Director 10,83,998 Lykis Limited Remuneration Committee of Lykis Limited

Nil

Adv. Hakubhai J Lalakiya

Director Nil Nil Nil Nil

CA S T Shah Director Nil Nil Nil Nil

CA Hemantkumar J Bhatt


Hasmukh H Adhvaryoo


32 33

Responsibilities of Independent Chairman, the Executive Co-Chairman and the CEO and Managing Director

The responsibilities and authorities of these officials are as follows:

Managing Director The Managing Director is responsible for corporate strategy, brand equity, planning, external contracts and all management matters. He is also responsible for achieving the annual business targets and acquisitions.

Definition of Independent Directors

According to Clause 49 of the Listing Agreement with Indian stock exchanges, an independent director means a person who is not an officer or employee of the Company or its subsidiaries or any other individual having a material pecuniary relationship or transactions with the Company which, in the option of our Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of the directors

Board Membership Criteria

Board members are expected to possess the expertise skills and experience required to manage and guide a high-growth, high-tech automobile company. Expertise in strategy, technology, finance, quality and human resources is essential. Most of the members are between the age group of 40 to 80 years. Board members are expected to rigorously prepare for, attend and participate in all Board and applicable committee meetings. Each member is expected to ensure that personal commitments, current as well as future, do not materially interfere with their responsibilities towards the Company.

Selection of New Directors

The Board is responsible for the selection of new directors. The Board delegates the screening and selection process involved in selecting new directors to the committee, which consist exclusively of independent directors. The committee in turn makes recommendations to the Board on the induction of any new directors.

Membership Term

The Board constantly evaluates the contribution of the members and periodically shares update with the shareholders about re-appointments as per statute. The current law in India mandates the retirement of one third of the Board members (who are liable to retire by rotation) every year, and qualifies the retiring members for re-appointment. Executive directors are appointed by the shareholders for the tenure of the maximum period of three years, but are eligible for re-appointment upon completion of their term.

Board Compensation Policy

The remuneration committee determines and recommends to the Board the compensation payable to the director. All Board-level compensation is approved by the shareholders and separately disclosed in the financial statements. Remuneration of the executive directors consists of a fixed component. The remuneration committee makes a quarterly appraisal of the performance of the executive directors based on a detailed performance related matrix. The annual compensation of the executive directors is approved by the Board of Directors in Board Meeting as well as by the Shareholders at the shareholders’ meeting, within the parameters set by the remuneration committee.

Cash compensation Paid to Directors in Fiscal 2013 (Rs. in lacs)

Name of the directorFixed Salary

Basic Salary Perquisites/ Allowance Retirement benefits Total Fixed Salary

J J Chandra 60 - - 60

Mahendra J Patel 54 - - 54

Niraj J Chandra 13.27 2.78 - 16.05

No remuneration by way of salary or perquisites or commission paid to any of the Non-Executive Directors during the year 2012-13

34

Sitting fee paid to the Non-Executive Directors, for 2012-13 are as detailed below:

Name of Non Executive Director Sitting Fee (Rs.)

CA Rajesh Dhruva 7,000

Suresh Kaneria 7,000

Adv. Hakubhai J Lalakiya 10,000

Ramniklal Kotecha 6,000

CA S T Shah 3,000

Hasmukh H Adhvaryoo 2,000

CA Hemantkumar J Bhatt 2,000

Vijay K Kedia 9,000

Total 46,000

Membership in Other Boards

Executive directors may, with the prior consent of the chairperson of the Board of Directors, serve on the boards of corporate or government bodies whose interest are germane to the future of the IT and software business, or the key economic institutions of the nation, or whose primary objective is benefiting society. Independent directors are not expected to serve on the boards of competing Companies. Other than this there are no limitations except those imposed by law and good corporate governance practices. The outside directorships held by each of our directors are listed in the composition of the Board and Directorship table in this section.

B. Board MeetingsScheduling and Selection of Agenda Items for Board Meetings

Dates for board meeting in the ensuing year are decided in advance. Most Board meetings are held at our registered office. The Chairperson of the Board and the Company Secretary draft the agenda for each meeting along with explanatory notes and distribute these in advance to the directors. Every Board member can suggest additional items for inclusion in the agenda. The Board meets at least once a quarter to review the quarterly results and other items on the agenda, and also on occasion of the Annual General Meetings of the shareholders. Additional meetings are held, when necessary. Independent Directors are expected to attend at least four Board meetings in a year. Committees of the Board usually meet on the same day before the formal Board meeting, or whenever the need arises for transacting business. Total 10 Board Meetings were held during the year ended on 31st March, 2013. Attendances of Members of Board of Directors in the said Meetings are as under:

Attendance of Directors in the Board Meeting during fiscal 2012-2013

Name of the Director No. of Meetings held No. of Meetings attended

J J Chandra 10 10

Mahendra J Patel 10 10

Niraj J Chandra 10 10

Vijay K Kedia 10 9

CA Rajesh Dhruva** 7 7

Suresh Kaneria** 7 7

Adv. Hakubhai J Lalakiya 10 10

Ramniklal Kotecha* 6 6

CA S T Shah *** 3 3

CA Hemantkumar J Bhatt**** 2 2

Hasmukh H Adhvaryoo**** 2 2*Resigned w.e.f. 10th November, 2012

** Resigned w.e.f. 27th December, 2012

***Appointed w.e.f. 10th November, 2012

****Appointed w.e.f. 27th December, 2012

Note: All the directors attended the Annual General Meeting held on 26th June, 2012.

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Availability of Information to Board Members

The Board has unfettered and complete access to any information within the Company, and to any of the employees. At Board Meetings, managers who can provide additional insight into the items being discussed are invited. Regular updates provided to the Board include:

• Annualoperatingplansandbudgets,capitalbudgetsandupdates

• Quarterlyresults

• Minutes of the meetings of audit, remuneration and shareholders grievance committees as well asabstracts of circular resolution passed, if any.

• Generalnoticeofinterestreceivedfromdirectors

• Dividenddata

• InformationonrecruitmentandremunerationofseniorofficersjustbelowtheBoardlevel.

• Materiallyimportantlitigations,showcause,demand,prosecutionandpenaltynotices

• Fatalorseriousaccidents,dangerousoccurrences,andissuesrelatedtomaterialeffluentsorpollution

• Anymateriallyrelevantdefaultsinfinancialobligationstoandbyus

• Anyissuethatinvolvespossiblepublicorproductliabilityclaimsofsubstantialnature

• Anysignificantdevelopmentinvolvinghumanresourcesmanagement

• Saleofinvestmentsandassetsofmaterialnature,whicharenotinnormalcourseofbusiness

• DetailsofforeignexposureandthesteptakenbytheManagementtolimitrisksofadverseexchangeratemovement

• Non-compliancewithanyregulatory,statutoryorlistingrequirementsaswellasshareholdersgrievancessuch as non-receipt of dividend warrants and delays in share transfer etc.

Discussion with Independent Directors

The Board’s policy is to regularly have separate meetings with independent directors to update them on all business-related issues and new initiatives. In such meetings, the executive directors and other members of the senior management make presentations on relevant issues.

In addition, our independent directors meet periodically in an executive session that is without any of the executive directors, or the Management.

Materially Significant Related Party Transactions

There have been no materially significant related party transactions, monetary transactions or relationship between the Company and directors, the Management, their relatives, except for those disclosed in the financial statements for the year ended March 31, 2013.

C. Board Committees

Currently, the Board has three committees namely audit committee, remuneration committee, shareholders’ grievance committee All committees consist entirely of independent directors.

The Chairperson of the Board in consultation with Company Secretary and the committee chairperson determine the frequency and duration of the committee meetings. Recommendations of the committees are submitted to the entire Board for consideration and approval.

The quorum for meetings is either two members or one-third of the members of the committee, whichever is higher.

1. Audit Committee

Ourauditcommittee(‘thecommittee’)comprisesthreeindependentdirectors:

We are listed on the BSE Limited and have applied for listing on National Stock Exchanges of India Limited. Clause 49 of listing Agreement makes it mandatory for listed companies to adopt an appropriate audit committee charter. Our committee adopted a charter, which meets the requirements of clause 49 of the listing Agreements.

The primary objective of the committee is to monitor and provide effective supervision of the management’s financial reporting process to ensure accurate and timely disclosures, with the highest level of transparency, integrity and

36

quality of financial reporting. The committee oversees the work carried out in the financial reporting process by the management, the internal Auditors and the independent Auditors, and notes the processes and the safeguard employed by each. The committee has the ultimate authority and responsibility to select, evaluate and, where appropriate replace the independent Auditors in accordance with the law. All possible measures must be taken by the committee to ensure the independence and objectivity of the independent Auditors.

The Committee presently consisting of three Independent and Non-Executive Directors, CA S T Shah, CA Hemantkumar J Bhatt and Adv. Hakubhai J Lalakiya. CA S T Shah and CA Hemantkumar J Bhatt are Chartered Accountants by qualification and having vast experience in field of finance, taxation, management consultancy, and audit. Adv. Hakubhai J Lalakiya is a lawyer having wide experience. The Audit Committee was reconstituted w.e.f. 27th December, 2012 consequent to resignation of CA Rajesh Dhruva & Suresh Kaneria w.e.f. that date. CA S T Shah and CA Hemantkumar J Bhatt had been made members of the Committee and the former had been acting as the Chairman of the Committee

CS Purvi P Mehta, Company Secretary & Compliance Officer of the Company, is acting as Secretary to the Committee.

Audit Committee Attendance during Fiscal 2013

Five meetings of audit committee were held during the year on the year on 31st March, 2013 on May 12, 2012, July 30, 2012, November 10, 2012, December 27, 2012and February 04, 2013.

Name of Committee Member No. of Meetings held No. of Meetings attended

CA Rajesh Dhruva* 3 3

CA S T Shah ** 2 2

Suresh Kaneria * 3 3


CA Hemantkumar J Bhatt*** 2 2

Note * Resigned from the committee consequent to his resignation from the Board w.e.f. 27th December, 2012 ** Admitted to the committee consequent to his appointment on the Board w.e.f 10th November, 2012 *** Admitted to the committee consequent to his appointment on the Board w.e.f 27th December, 2012

Audit Committee Report for the year ended March 31, 2013

Each member of the committee is an independent director, according to the definition laid down in the audit committee charter, and Clause 49 of the Listing Agreement.

The management is responsible for company’s internal control and the financial reporting process. The independent Auditors are responsible for performing an independent audit of the Company’s financial statements in accordance with generally accepted auditing standards and for issue a report thereon. The committee’s responsibility is to monitor these processes. The committee is also responsible for overseeing the process related to the financial reporting and information dissemination. This is to ensure that the financial statements are true, fair, sufficient and credible. In addition, the committee recommends to the Board the appointment of the Company’s internal and independent Auditors.

In this context, the committee discussed with the company’s auditor, the overall scope and plans for the independent audit. The Management representation to the committee that the company’s financial statements were prepared in accordance with the generally Accepted Accounting principle (GAAP). The committee discussed with the Auditors, in the absence of the Management (whenever necessary), the Company’s audited financial statements including the Auditors’ judgments about and the clarity of disclosures in the financial statements.

Relying on the review and discussion with the Management and the independent Auditors, the audit committee believes that the company’s financial statements are fairly presented in conformity with GAAP.

The committee has also reviewed the internal controls put to ensure that the accounts of the company are properly maintained and that the accounting transactions are in accordance with prevailing Laws and regulations. In conducting such review, the committee found no material discrepancy or weakness in the internal control systems of the company.

The committee also reviewed the financial policies of the company and expressed its satisfaction with the same.

The company Auditors provided to the committee the written disclosures required by the Standard on Auditing (SA) -260 issued by the Institute of Charted Accountants of India (ICAI) based on which the committee discussed the Auditors. After review, the committee expressed its satisfaction on the independence of the internal and the statutory Auditors.

36 37

Based on the committee discussion with the Management and the Auditors and the committee review of the representation of the Management and the report of the auditor to the committee, the committee has recommended to the directors that the audited financial statements of Atul Auto Limited for the year ended on March 31, 2013 prepared as per Indian GAAP, be accepted by the Board as a true and fair statements of the financial status of the company.

The committee has also recommended to the Board the re-appointment of Maharishi & Co., Chartered Accountants, as the statutory Auditors of the company for the fiscal year ending on March 31, 2014, and that the necessary resolution for appointing them as auditor be placed before the shareholder.

In conclusion, the committee is sufficiently satisfied that it has complied with its responsibilities as outlined in the audit committee charter.

2. Remuneration Committee

The Committee presently consisting of three Independent and Non-Executive Directors: CA S T Shah, Hasmukh H Adhvaryoo and Adv. Hakubhai J Lalakiya. CA S T Shah is a Chartered Accountant by qualification and having vast experience in field of finance, taxation, management consultancy, and audit. Hasmukh H Adhvaryoo is an expert in field of Human Resources Management. Adv. Hakubhai J Lalakiya is a learned advocate having wide experience of law. The Remuneration Committee was reconstituted w.e.f. 27th December, 2012 consequent to resignation of CA Rajesh Dhruva & Suresh Kaneria w.e.f. that date. Hasmukh H Adhvaryoo and CA S T Shah had been made members of the Committee and the former had been acting as the Chairman of the Committee.

ThepurposeofthecommitteeoftheBoardofdirector(‘theBoard’)shallbetodischargetheBoard’sresponsibilitiesrelating to compensation of the company executive directors and member of the Executive council. The committee has the overall responsibility of approving and evaluating the compensation plan, policies and programs for executive directors and for the member of the executive council.

The committee shall annually review and approve for the Managing Director, the executive director and executive council (a) the annual base salary; (b) the annual incentive bonus, including the specific goals and amount; (c) equity compensation; (d) employment agreement, severance arrangements, and change in control agreements / provision and (e) any other benefits, compensation or arrangements.

The committee in consultation with the Managing Director, shall review the performance of the executive director each quarter or at such interval as may be necessary, on the basis of the detailed performance parameters set for each of the executive director at the beginning of the year. The remuneration committee may, from time-to-time, also evaluate the usefulness of such performance parameters, and make necessary amendments.

Remuneration Committee Attendance during Fiscal 2013

Five Meetings of Remuneration Committee were held during the year ended on 31ST March, 2013 on May 12, 2012, July 30, 2012, November 10, 2012, December27,2012 and February4, 2013.





CA S T Shah ** 2 2

Hasmukh H Adhvaryoo*** 2 2Note * Resigned from the committee consequent to his resignation from the Board w.e.f. 27th December, 2012 ** Admitted to the committee consequent to his appointment on the Board w.e.f. 10th November, 2012 *** Admitted to the committee consequent to his appointment on the Board w.e.f. 27th December, 2012

Remuneration Committee Report for the year ended March 31, 2013

The committee reviewed the performance of all whole-time director and the member of executive council based on a detailed performance parameters set for each whole-time director and approved the payment of various compensation to each of them. Further the committee evaluated the usefulness of the performance parameters and suggested necessary change to the same.

The committee believes that the compensation and benefits are adequate to motivate and retain the senior officers of the company. Apart from the said disclosures, none of the director had a material beneficial interest in any contract of significance to which the company or any of its subsidiaries were a party, during the financial year.

38

3. Shareholders’ Grievance Committee

The Committee presently consisting of three Independent and Non-Executive Directors, CA S T Shah, CA Hemantkumar J Bhatt and Hasmukh H Adhvaryoo. CA S T Shah and CA Hemantkumar J Bhatt are Chartered Accountants by qualification and having vast experience in field of finance, taxation, management consultancy, and audit. Hasmukh H Adhvaryoo is an expert in field of Human Resources Management. The Shareholders’ Grievances Committee was reconstituted w.e.f. 27th December, 2012 consequent to resignation of CA Rajesh Dhruva & Suresh Kaneria w.e.f. that date. CA Hemantkumar J Bhatt, CA S T Shah and Hasmukh H Adhvaryoo had been made members of the Committee, and CA Hemantkumar J Bhatt had been acting as the Chairman of the Committee.

Shareholders Grievance Committee Attendance during Fiscal 2013

Four Meetings of Shareholders’ Grievance Committee were held during the year on 31st March, 2013 on May 12, 2012, July30, 2012, November9, 2012 &December 27, 2012





CA Hemantkumar J Bhatt ** 1 1

CA S T Shah *** 1 1

Hasmukh H Adhvaryoo** 1 1Note * Resigned from the committee consequent to his resignation from the Board w.e.f. 27th December, 2012

** Admitted to the committee consequent to his appointment on the Board w.e.f. 27th December, 2012

*** Admitted to the committee consequent to his appointment on the Board w.e.f. 10th November, 2012

Shareholders Grievance Committee Report for the year ended March 31, 2013

The Committee expresses satisfaction with the Company’s performance in dealing with investor grievances and its share transfer system. The committee has the mandate to review and redress shareholder grievance

The details of complaints resolved during the financial year ended March 31, 2013 are as follows:

Received Resolved Closing

14 14 -

Dematerialization of Securities

As on 31st March, 2013, 1,03,85,248 shares (out of total 1,09,71,600 equity shares) are dematerialized. Members who have still not dematerialized their shares, are requested to dematerialize the same to avail benefit of paperless trading of securities. Further, 100 % shares of promoters are dematerialized as on 31st March, 2013.

D. Management Review and Responsibility

Formal Evaluation of Officers

The remuneration committee of the board approves the compensation and benefits for all Executive Board Members. Another committee, headed by the Managing Director, reviews, evaluates and decides the annual compensation of our officers from the level of vice president.

Board Interaction with Clients, Employees, Institutional Investors, the Government and Media

The Chairman & Managing Director, Non executive and Non-Independent Director and Vice President-Finance interact with investors, the media and various Government authorities.

Risk Management

We have an integrated approach to management risks inherent in various aspects of our business.

Management’s Discussion and Analysis

A detailed report on the management’s discussion and analysis is provided in the management’s discussion and analysis section of the Annual report.

38 39

E. Shareholders

Disclosures Regarding the Appointment or Re-appointment of Directors

CA S T Shah has been appointed as an additional director w.e.f. 10th November, 2012. CA Hemantkumar J Bhatt and Hasmukh H Adhvaryoo have been appointed as Additional Directors w.e.f. 27th December, 2012. CA S T Shah, CA Hemantkumar J Bhatt and Hasmukh H Adhvaryoo are Independent and Non-Executive Directors of the Company. Further, Ramniklal Kotecha had been resigned w.e.f. 10th November, 2012. Suresh Kaneria and CA Rajesh Dhruva had been resigned w.e.f. 27th December, 2012.

Mahendra J Patel and Niraj J Chandra are Directors liable to retire by rotation at the ensuring Annual General Meeting and being eligible, offer themselves for reappointment.

Further, the Board had reappointed J J Chandra, as Chairman & Managing Director and Mahendra J Patel as wholetime Director for three years w.e.f. 1st April, 2013 and also reviewed /revised remuneration of J J Chandra, Mahendra J Patel and Niraj J Chandra w.e.f. 1st June, 2013.

Communication to the Shareholders

The report contains select financial data extracted from the audited financial statements under Indian GAAP. The quarterly report along with additional information is also posted on our website. Moreover, the quarterly/ annual results and official news releases are generally published in the news papers. Quarterly and annual financialstatements are also posted in our website.

Investor Grievances

We have a Board–Level shareholders grievance committee to examine and redress shareholders and investors complaints. The status on complaints and share transferred are reported to the entire board in each meeting. The details of share transferred and the nature of complaints are provided in shareholders information section of the Annual Report. For shares transferred in physical form, the adequate notice to the seller is provided before registering the transfer of the shares. For matters regarding shares transfer in physical form, issue of duplicate share certificates, change of address, shareholders should communicate with Sharex Dynamic (India) Pvt. Ltd., our registrar and share transfer agent (RTA) the address of which is published in shareholder information section of Annual Report.

Share transactions in the electronic form can be effected in a much simpler and faster manner. After confirmation of sale/purchase transactions from the broker, shareholder should approach depository participant with a request to debit or credit the account for the transaction. The depository participant will arrange to complete the transactions by updating the account. There is no need for separate communication to the company to register the share transfer.

General Body Meetings

The details of last three Annual General Meetings are as follows:

Financial year ended Date &Time Venue Special Resolution Passed

March 31, 2010 July 28, 2010at

4.00 p.m.

Plot No. 1 to 4,Survey no. 86,

NationalHighway 8-B,

Near Microwave Tower,Shapar,

Gujarat, India

• Reappointment&revisionofremunerationofJJChandraasaChairman & Managing Director w.e.f. 1st April, 2010.

• RevisionofremunerationandredesignationofMahendraJPatel as Whole time Director

• ReappointmentofMittalSunilKumarastheWholetimeDirector

March 31, 2011 July 30, 2011at

4.00 p.m.

• ReappointmentofMittalSunilKumarasaWholetimeDirectorw.e.f. 1st April, 2011.

March 31, 2012 June 26, 2012at

10.00 a.m.

• AppointmentofNirajJChandraasaWholetimedirectorandfixed remuneration w.e.f 1st March, 2012

• RevisionofdirectorsRemunerationofChandraJJandMahendra J Patel

• Increasetheauthorizedcapitalofthecompanyfrom8croresto 15 crores.

• AlterationofCapitalclauseofmemorandumofassociation.• Issueofonebonusshareforeverytwoequitysharesheldas

on the book closure date.

40

Compliance with Non-mandatory Requirements of Clause 49 of the Listing Agreement

Auditors’ certificate on corporate governance

Clause49ofthelistingagreement(‘theclause’)mandatesustoobtainacertificatefromeithertheAuditorsorpractising company secretaries regarding compliance of conditions of corporate governance as stipulated in the clause and annex the certificate with the Directors’ report, which is sent annually to all our shareholders. We have obtained a certificate to this effect from the Auditors of the Company and same is given as an Annexure to this report on Corporate Governance.

The clause 49 states that the non-mandatory requirements may be implemented as per our discretion. However, the disclosures of compliance with mandatory requirements and adoption (and compliance) / non-adoption of non- mandatory requirements shall be made in this section of the Annual Report.

Managing Director’s certification

As required by clause 49 of the listing agreement, the Managing Director’s certificate is given as an Annexure to this report on Corporate Governance.

Code of Conduct

Incompliancewithclause49oftheListingAgreement,thecompanyhasadoptedacodeofconductandEthics(‘theCode’). This Code is also applicable to the members of the Board.

All the members of the board and senior employees of the company have affirmed compliance to the code as at March 31, 2013. A declaration to this effect, signed by managing director and the same is provided in the Managing Directors’ certification, annexed to this report on Corporate Governance.

Details of Non-compliance

There has been no instance of non compliance with any legal requirements nor have there been any condition imposed by any stock exchange, SEBI, on any matters relating to the capital market over the last Four years.

Company complies with the following non-mandatory requirements:

Remuneration Committee

We have constituted Remuneration committee. A detailed note on compensation / remuneration committee is provided under remuneration committee in this section.

Shareholder’s Rights

The Clause states that a half-yearly declaration of financial performance, including summary of the significant events in the last six months, may be sent to each shareholder.

We communicate with investors regularly through email, telephone and face-to-face meetings either in investor conferences or Company visits we also leverage the internet in communicating with our investor base. We announce quarterly financial results within six weeks of the close of a quarter. The announcement of quarterly result is followed by media briefing in television channels, press conference and conference calls.

Whistleblower Policy

We have established a mechanism for our employees to report concerns about un-ethical behavior, actual or suspected fraud, or violation of our Code of Conduct and Ethics policy. It also provides for adequate safeguards against victimization of employees who avail of the mechanism, and also allows direct access to the chairperson of the audit committee in exceptional cases. We further affirm that no employee has been denied access to the audit committee. Auditors’ Certificate on Corporate Governance

40 41

To,The MembersAtul Auto Limited

WehaveexaminedthecomplianceofconditionsofCorporateGovernancebyAtulAutolimited(‘theCompany),forthe year ended on 31st March, 2013, as stipulated in clause 49 of the Listing Agreement of the company with the stock exchange.

The compliance of condition of Corporate Governance is the responsibility of the management. Our examination has been Limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring the Compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the company.

In our opinion and to the best our information and according to the explanation given to us and based on the representation made by the directors and management, we certify that the Company has complied with the condition of Corporate Governance as stipulated in the above mention Listing Agreement.

We further state that such compliance is neither an assurance as to future viability of the Company nor the efficiency or the effectiveness with which the management has conducted the affairs of the Company.

For Maharishi & Co.Chartered AccountantsFirm’s registration No.124872W

Prashant MaharishiPartnerMembership No. 41452


Auditors’ Certificate on Corporate Governance

42

Managing Director’s Certification

ToThe Board of DirectorsAtul Auto Limited

I, J J Chandra, Chairman and Managing Director of Atul Auto Limited, to the best of my knowledge and belief, certify that:

1. I have reviewed the Balance sheet and Profit and Loss account, including all the schedules and notes on accounts, as well as the Cash Flow statements, and the directors’ report.

2. Based on my knowledge and information, these statements do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made ,in light of the circumstances under which such statement were made, not misleading with respect to the statements made.

3. Based on my knowledge and information, the financial statements, and other financial information included in this report, present in all material respects a true and fair view of the company’s affairs, the financial condition, results of operation and cash flows of the company as of, and for, the period presented in this report, and are in compliance with the existing accounting standard and / or applicable laws and regulation.

4. To the best of my knowledge and belief there are no material transactions entered into by the Company during the year that are fraudulent, illegal or violative of the Company’s Code of Conduct and Ethics.

5. I am responsible for establishment and maintaining disclosure controls and procedures and internal controls over financial reporting for the Company, and I have:

a. Designed such disclosure control over and procedures to ensure that material information relating to the company, including its consolidated subsidiaries, is made know to us by other within those entities, particularly during the period in which this report is being prepared.

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Generally Accepted Accounting Principles (GAAP).

c. Evaluated the effectiveness of the Company’s disclosure, controls and procedures.

d. Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal year that has materially affected, or is reasonable likely to materially affect, the Company’s internal control over financial reporting.

6. I have disclosed, based on our most recent evaluation, wherever applicable, to the Company’s auditors and the audit committee of the Company’s Board of Directors (and person performing the equivalent functions):

a. There were no deficiencies in the design or operation of internal controls, that could adversely affect the Company’s ability to record, process, summarize and report financial data, and there have been no material weaknesses in internal controls over financial reporting including any corrective actions with regards to deficiencies.

b. There were no significant changes in internal controls during the year covered by this report.

c. All significant changes in accounting policies during the year, if any, and that the same have been disclosed in the notes to the financial statements.

d. There were no instances of fraud of which we are aware, that involve the Management or other employees who have a significant role in the Company’s internal control system.

7. In the event of any materially significant misstatements or omission, I will return to the Company that part of any bonus or incentive or equity-based compensation, which was inflated on account of such errors.

8. I affirm that I have not denied any personnel, access to the audit committee of the Company (in respect of matter involving alleged misconduct) and we have provided protection to whistleblowers from unfair termination and other unfair or prejudicial employment practices.

9. I further declare that all Board member and senior managerial personnel have affirmed compliance with the Code of Conduct and Ethics for the current year.

J J Chandra



42 43

Corporate

Atul Auto Limited was incorporated in Maharashtra in 1986 as Atul Auto (Jamnagar) Private Limited, a private limited company under the Indian Companies Act, 1956. The registered office of the company was transferred to Jamnagar in the state of Gujarat on 24th January, 1992. Subsequently on 20th April, 1994 the registered office was transferred to Dist. Rajkot, Gujarat. The Name of the company was changed from Atul Auto (Jamnagar) Private Limited to Atul Auto Private Limited on 12th August, 1994. The company was subsequently converted into a Public Limited company and fresh certificate of incorporation was obtained on 12th August, 1994 form the Registrar of the Companies, Gujarat. The company set up its plant at shapar (Rajkot district), Gujarat. Its commercial production commenced in July 1992. The company has made initial public offer of 536.25 lacs at a premium of 12/- per share in 1996. The address of our registered office is Survey No. 86, Plot No. 1 to 4, National Highway 8-B, Near Microwave Tower, Shapar (Veraval), Dist. Rajkot, Gujarat, India.

History of Bonus Issue and Right Issue

Fiscal 1994-95 2000-01 2011-12 2012-13

Bonus 4 : 5 1 : 5 - 1:2

Right 1 : 1 - 1 : 4 -

Unclaimed dividend

Section 205 of the Companies Act, 1956, mandates that the Company transfers dividend that has been unclaimed for a period of seven years from the unpaid dividend account to the Investors Education and Protection Fund (IEPF). In accordance with the following schedule, the dividend for the years mentioned as follows, if unclaimed within a period of seven years, will be transferred to IEPF.

Year Type of dividend

Dividend per share

Date of declaration

Due date for transfer Amount (Rs.)

2006 Final 1/- 24/07/2006 23/07/2013 46,4842007 Final 1/- 28/9/2007 27/09/2014 77,9462008 Final 1/- 27/09/2008 26/09/2015 54,2942009 Final 0.50 29/09/2009 28/09/2016 1,46,7782010 Final 2/- 28/07/2010 27/07/2017 2,68,5862011 Final 4/- 30/7/2011 29/07/2018 3,73,684 2012 Final 5/- 26/06/2012 25/06/2019 11,93,090

The Company is sending periodic communication to the concerned shareholders advising them to lodge their claims with respect to unclaimed dividend. Shareholders are cautioned that once unclaimed dividend is transferred to IEPF, no claim shall lie in respect thereof with the Company.

Annual General Meeting

Date and time Tuesday, 16th July 2013 at 11.00 a.m.

Venue Plot No. 1 to 4, Survey no. 86, National Highway 8-B, Near Microwave Tower, Shapar (Veraval), Dist. Rajkot Gujarat

Book closure date 8th July 2013 to 15th July 2013 (Inclusive of both days)

Dividend payment date Between 22nd July, 2013 to 7th August, 2013.

Investor Awareness

Maintaining the highest standards is not a matter of mere form, but of substance. In continuation of our efforts in that direction, we have provided a synopsis of some of your rights and responsibilities as a shareholder on our website www.atulauto.co.in. We encourage you to visit our website and read the document. We hope that the document will give you appropriate guidance, though in brief, on any questions regarding your rights as a shareholder.

Dematerialization of shares and liquidity

Atul Auto Ltd’s shares are tradable compulsorily in electronic form and, through Sharex Dynamic (India) Private Limited, Registrars and Share Transfer Agents in case of physical holding. As at March 31, 2013, 94.66 % of our shares were held in dematerialized form and the rest in physical form. Shares held in dematerialize and physical modes as March 31, 2013 are as follows:

Shareholder’s Reference

44

Category Number of shares % to total equity

Dematerialize mode 1,03,85,248 94.66 %

Physical mode 5,86,352 5.34 %

Grand total 1,09,71,600 100 %

To enable us to serve our investors better, we request shareholders whose shares are in physical mode to dematerialize shares and to update their bank accounts with their respective depository participants.

Reconciliation of Share Capital Audit

The Board of Directors of the Company has appointed MJP Associates, Practising Company Secretaries, to conduct Reconciliation of Share Capital Audit of the Company. The findings of reconciliation of share capital audit are satisfactory.

Investor Complaints

Nature of complaintsReceived Attended

2012-13 2011-12 2012-13 2011-12

Dividend/Annual Report Related 14 22 14 22

We attended to most of the Investor’s grievances / correspondences within a period of ten days from the date of receipt of such grievances. The exceptions have been for cases constrained by disputes or legal impediments.

Designated Email Address for Investor Services

In terms of Clause 47 (f) of the Listing Agreement, the designated email address for investor complaints is [email protected].

Legal Proceedings

There are certain pending cases related to disputes over title to shares in which we had been made a party. However, these cases are not material in nature.

Shareholders Holding More than 1% of the Shares

The details of shareholders holding more than 1% of the equity as at March 31, 2013 are as follows :

Name of Shareholders Number of Shares % of Total ShareholdingVijay Kishanlal Kedia 10,83,998 9.88%

Kedia Securities Pvt Ltd 9,85,500 8.98%

Jayantibhai Jagjivandas Chandra 8,05,303 7.34%

Maheshbhai Jagjivandas Chandra 6,45,033 5.88%

Dharmendrabhai Jagjivandas Chandra 6,33,663 5.78%

Harishbhai Jagjivandas Chandra 5,82,393 5.31%

Bharat Jagjivandas Chandra 4,87,953 4.45%

Manishaben Atulkumar Chandra 4,66,110 4.25%

Kashiben Jagjivandas Chandra 3,39,588 3.10%

Anita Nirajbhai Chandra 2,15,500 1.96%

Prafulaben Jayantilal Chandra 1,84,843 1.68%

Nirajbhai Jayantibhai Chandra 1,42,339 1.30%

Mahendrakumar Jamnadas Patel 1,38,924 1.27%

Rekhaben Maheshbhai Chandra 1,27,650 1.16%

Jamnadas Kurjibhai Patel 1,22,280 1.11%

Ushaben Dharmendrabhai Chandra 1,22,137 1.11%

Vasantrai Kurjibhai Patel 1,14,000 1.04%

Ramaben Jamnadas Patel 1,13,256 1.03%

Dayalal Gordhandas Patel 1,12,758 1.03%

Chetankumar Vasantrai Patel 1,10,268 1.01%

44 45

Distribution of shareholding as at March 31, 2013

Range of Equity Shares Held (Rs.)

Number of Shareholders % of Shareholders Number of Shares % of Total number

of shares

Up to 5000 2,236 78.93% 28,83,690 2.63%

2001-10000 229 8.08% 17,08,240 1.56%

10001-20000 137 4.84% 20,59,300 1.88%

20001-30000 51 1.80% 12,36,680 1.13%

30001-40000 32 1.13% 11,29,600 1.03%

40001-50000 16 0.56% 6,86,160 0.63%

50001-100000 53 1.87% 37,31,810 3.40%

100001 and above 79 2.79% 9,62,80,520 87.75%

Total 2,833 100.00% 10,97,16,000 100.00%

Share transfers in Physical Form

Shares sent for physical transfer are affected after giving a 15 days’ notice to the seller for confirmation of the sale.

Listing on stock exchanges & ISIN for Dematerialzation

Stock Exchange where securities of Company are listed BSE Limited, Mumbai

BSE Script Code 531795

ISIN (for demat) INE951D01010

The listing fees for fiscal 2012-2013 have been paid for BSE Limited.

Shareholding Pattern

Category

March 31, 2013 March 31, 2012

Share-holders

(No.)

Voting strength

(%)

Number of shares held

Share-holders

(No.)

Voting strength

(%)

Number of shares

held

Promoters’ holding

Indian Promoters 29 56.6 62,11,617 29 60.8 44,47,746

Total promoters’ holding (A) 29 56.6 62,11,617 29 60.8 44,47,746

Public shareholding

Institutional investors - - - - - -

Mutual funds - - - - - -

Banks, financial institutions and insurance companies

- - - - - -

Foreign institutional investors 1 0.1 11,828 - - -

Others -

Private corporate bodies 118 10.8 11,85,498 96 13.5 9,85,436

Indian public 2,574 27.6 30,27,403 1,705 21.2 15,53,839

NRIs / OCBs / Foreign nationals 100 4.6 5,03,969 65 4.4 3,20,169

Clearing Members 11 0.3 31285 10 0.1 7,210

Total public shareholding (B) 2,804 43.38 47,59,983 1,876 39.2 28,66,654

Total (A + B) 2,833 100 1,09,71,600 1,905 100 73,14,400

46

Stock market data – Exchanges in India

The monthly high and low quotations, as well as the volume of shares traded at the BSE for the current year are provided as follows:

ParticularsBSE

High (Rs.) Low (Rs.) Volume (No of shares)

April, 2012 142.50 113.15 69,131

May, 2012 163.00 132.50 1,52,693

June, 2012 203.00 140.05 9,29,611

July, 2012 193.00 91.15 6,69,388

August, 2012 116.90 89.95 11,68,404

September, 2012 110.50 96.00 6,24,651

October, 2012 120.85 108.00 2,61,226

November, 2012 168.45 114.00 4,91,197

December, 2012 181.00 156.10 6,10,257

January, 2013 222.20 168.00 10,71,438

February, 2013 226.90 175.05 8,55,657

March, 2013 190.75 139.90 3,04,239

Total (*)226.90 (*)89.95 72,07,892

Notes: The numbers of shares outstanding are 1,09,71,600.*represents yearly high and yearly low of equity shares. Independent Auditor’s Report

46 47

ToThe Members of ATUL AUTO LTD.

Report on the Financial Statements

WehaveauditedtheaccompanyingfinancialstatementsofAtulAutoLimited(‘theCompany’),whichcomprisetheBalance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(b) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors’ Report) Order, 2003 (“the Order”) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books

c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

Independent Auditor’s Report

48

e. on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For Maharishi & Co.

Chartered Accountants

Firm Registration No.124872W

Prashant MaharishiPartnerMembership No.041452


48 49

ANNEXURE TO AUDITORS’ REPORT

[Referred to in paragraph 1 under the heading of “reporting on Other Legal and Regulatory requirements” of our report of even date to the members of ATUL AUTO LIMITED on the financial statements for the year ended March 31, 2013]

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

(b) As explained to us, all the fixed assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, the company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the company is not affected.

(ii) (a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the explanation and information given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and as explained to us, there was no material discrepancies were noticed on physical verification carried out at the end of the year as compared to the book records.

(iii) As informed, the Company has neither granted nor taken any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions stated in paragraph 4 (iii) (b), (c) and (d) of the order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct weakness in internal control system of the company.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of ` five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under. Therefore, the provisions of clause (vi) of paragraph 4 of the order are not applicable to the company.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the cost records maintained by the Company pursuant to the companies (Cost Accounting Records) Rules, 2011 prescribed under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records with a view to determining whether they are accurate or complete.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it.

50

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees’ state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable,

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the statute Nature of dues Amount

(Rs.)Period to which

the amount relatesForum where dispute is

pending

The Gujarat Sales Tax Act

Sales Tax 11,83,791 2000-01 Gujarat High Court

The Central Sales Tax Act, 1956

CST 2,02,531 2001-02 Gujarat High Court

The Central Excise Act, 1944

Excise Duty 16,81,585 2006-07 & 2007-08 CESTAT


Excise Duty 61,825 2008-09 & 2009-10 Commissioner Appeals


Excise Duty 41,200 2008-09 Commissioner Appeals

The Finance Act, 1994

Service Tax 4,74,336 2008-09 & 2009-10 Commissioner Appeals

The Income Tax Act, 1961

Income Tax 66,850 2004-05 Income Tax Appellate Tribunal

The Income tax Act 1961

Income tax 67,34,163 2002-03,2003-04,2004-05

Income tax Appellate Tribunal


Income tax 20,03,740 2007-08 Income Tax Appellate Tribunal


Income Tax 6,23,260 2007-08 Commissioner Appeals


Income Tax 18,41,315 2009-10 Income Tax Appellate Tribunal


Income Tax 3,16,505 2009-10 Income Tax Appellate Tribunal

(x) The company does not have accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted loans & advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In respect of dealing/trading in shares, securities, debentures and other investments, in our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. All the shares, securities, debentures and other investments have been held by the Company, in its own name.

(xv) In our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

(xvi) The Company has not obtained any term loans during the year.

50 51

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of The Companies Act.

(xix) According to the information and explanations given to us, no debentures have been issued by the company during the year.

(xx) According to the information and explanations given to us, company has not made any public issue during the year.

(xxi) During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

For Maharishi & Co.

Chartered Accountants

Firm Registration No.124872W

Prashant Maharishi

Partner

Membership No.041452


52

Balance Sheet as at 31st March, 2013

Particulars Notes 31-Mar-13 31-Mar-12

I EQUITIES AND LIABILITIES

1 Shareholders Fund

(a) Share Capital 3 11,20,44,850 7,54,72,850

(b) Reserves & Surplus 4 63,09,89,826 48,53,88,299

Sub-Total Shareholder's Fund 74,30,34,676 56,08,61,149

2 Non - Current Liabilities

(b) Deferred tax liabilities (Net) 5 4,48,92,400 4,65,88,500

(c) Other Long term liabilities 6 2,57,76,000 2,04,76,000

(d) Long-term provisions 7 19,34,398 6,18,923

Sub-Total Non-Current Liabilities 7,26,02,798 6,76,83,423

3 Current Liabilities

(a) Short term Borrowing 8 - 3,88,65,281

(b) Trade payables 9 23,74,42,120 15,67,96,462

(c) Other current liabilities 10 4,84,42,091 6,12,80,621

(d) Short-term provisions 7 12,79,94,067 8,07,85,336

Sub-Total Current Liabilities 41,38,78,278 33,77,27,700

TOTAL EQUITIES & LIABILITIES 1,22,95,15,752 96,62,72,272

II ASSETS

1 Non-Current Assets

(a) Fixed Assets 11

(i) Tangible assets 42,05,07,859 38,41,84,582

(ii) Intangible assets 1,01,46,876 1,55,37,205

(iii) Capital work-in-progress 5,00,16,548 1,57,12,981

(b) Non-current investments 12 1,22,95,260 1,22,95,260

(c) Long-term loans and advances 13 3,84,71,540 4,58,73,207

Sub-Total - Non Current Assets 53,14,38,083 47,36,03,235

2 Current Assets

(b) Inventories 14 22,94,69,494 29,82,49,830

(c) Trade receivables 15 7,15,17,730 6,08,08,643

(d) Cash and cash equivalents 16 38,07,32,984 11,37,28,669

(e) Short-term loans and advances 17 1,56,01,903 1,93,59,430

(f) Other current assets 18 7,55,555 5,22,464

Sub-Total - Current Assets 69,80,77,668 49,26,69,036

TOTAL ASSETS 1,22,95,15,752 96,62,72,272

The notes referred to above forms an integral part of the Balance Sheet.As per our report of even date For Maharishi & Co., Chartered Accountants Firm Reg. No. 124872W

Prashant Maharishi, PartnerM. No. 41452Signed at Rajkot on 18th May, 2013

For and on behalf of Board

Chandra J J Patel M J Chairman and Managing Director Whole Time Director

Purvi P MehtaCompany Secretary

(Amount in Rs.)

Summary of Significant Accounting Policies 2.1

52 53

Statement of Profit & Loss for the year ended 31st March, 2013

Particulars Notes 31-Mar-13 31-Mar-12

I INCOME

Sales 19 4,07,45,95,597 3,28,66,97,048

Less: Excise -44,59,97,606 -30,69,18,239

Revenue from operations 3,62,85,97,991 2,97,97,78,809

Other operating revenue 98,06,269 84,58,081

Other income 20 1,97,61,818 59,32,435

TOTAL REVENUE 3,65,81,66,078 2,99,41,69,325

II EXPENSES

Cost of materials consumed 21 2,83,15,49,177 2,41,85,49,844

Changes in inventories of finished goods work-in-progress

22 74,43,736 -4,29,90,793

Employee benefits expense 23 21,01,07,648 16,60,37,364

Finance costs 24 40,33,072 76,47,116

Depreciation and amortization expense 25 4,43,70,912 4,25,88,621

Other expenses 26 18,84,60,109 17,11,68,288

TOTAL EXPENSES 3,28,59,64,654 2,76,30,00,440

IV Profit before tax & exceptional items (III-IV) 37,22,01,424 23,11,68,885

V Exceptional items 27 - -12,80,554

VI Profit before tax (V - VI) 37,22,01,424 23,24,49,439

VII Tax expense: 28

(1) Current tax 11,47,06,657 8,40,27,063

(2) Deferred tax -16,96,100 -74,80,770

Sub-Total Tax Expenses 11,30,10,557 7,65,46,293

VIII PROFIT/(LOSS) FOR THE YEAR 25,91,90,867 15,59,03,146

IX Earnings per equity share 29

Basic & Diluted - Before Bonus 35.44 24.77

Basic & Diluted - After Bonus 23.62 16.51






(Amount in Rs.)

Summary of Significant Accounting Policies 2.1

54

Cash Flow Statement for the year ended 31st March, 2013

Particulars 31-Mar-13 31-Mar-12

A. Cash flow from operating activities

Net profit before taxation 37,22,01,424 23,24,49,439

Adjustment for:

Depreciation & Impairment 4,43,70,912 4,25,88,621

Provision for diminution of Investment - 1,06,99,360

Loss/(Profit) on sale of fixed assets 1,24,736 -1,15,85,644

Effect of change in exchange rate on cash and cash equivalents -15,802 -

Interest Expenses on long term funds 16,61,337 57,95,090

Operating Profit before working capital changes 41,83,42,607 27,99,46,866

Movements in working capital:

Decrease/-Increase in Trade Receivable -1,07,09,087 -62,38,528

Decrease/-Increase in Inventories 6,87,80,336 -10,65,11,026

Decrease/-Increase in Non Current Assets(Loans & Advances and Other Assets)

-8,94,806 -9,74,309

Decrease/-Increase in Current Assets (Loans & Advances and Other Assets)

35,24,436 -52,21,070

Increase/-Decrease in Trade Payables 7,61,03,645 4,70,15,357

Increase/-Decrease in Non Current Liabilities 66,15,475 35,68,556

Increase/-Decrease in Current Liabilities & Provisions 55,91,475 1,46,87,392

Increase/-Decrease in short term borrowing relating operation -3,88,65,281 3,88,65,281

Sub-Total Movement in Working Capital 11,01,46,191 -1,48,08,347

Cash generated from operations 52,84,88,798 26,51,38,519

Direct taxes paid (net of refunds) -12,18,88,779 -6,95,51,383

NET CASH FROM OPERATING ACTIVITIES 40,66,00,019 19,55,87,136

B. Cash flow from investing activities

Purchase of fixed assets -9,59,73,373 -8,46,69,599

Tax paid on Capital Gain -59,16,425

Proceeds from sale of fixed assets 5,28,096 2,94,87,610

NET CASH FLOW FROM INVESTING ACTIVITIES -9,54,45,277 -6,10,98,414

C. Cash flow form financing activities

Repayment of long-term borrowings - -6,00,00,000

Proceeds from Issue of Shares - 4,38,86,400

Interest paid -16,61,337 -57,95,090

Dividend paid -3,65,72,000 -2,34,06,080

Tax on dividend paid -59,32,893 -37,97,051

NET CASH CLOW FROM FINANCING ACTIVITIES -4,41,66,230 -4,91,11,821

NET INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C) 26,69,88,513 8,53,76,901

Cash and cash equivalents at the beginning of the year 11,37,28,669 2,83,51,765

Cash and cash equivalents at the end of the year 38,07,17,183 11,37,28,669

Components of cash and cash equivalents as at the end of the year

Cash and cheques on hand 9,00,392 73,293

Investment in Liquid securities 33,82,14,142 6,51,96,958

Effect of change in cash or cash equivalent held inforeign currency due to exchange rate fluctuation

-15,801

With bank

- In current account 2,71,75,685 4,63,21,541

- In Fixed Deposit Account 1,22,81,903 11,28,608

- In Unpaid Dividend account 21,60,862 10,08,269

TOTAL 38,07,17,183 11,37,28,669






(Amount in Rs.)

54 55

Significant Accounting Policies andNotes on Financial Statements

1 Nature of Operations

Atul Auto Limited, incorporated on 18-06-1986 is a manufacturer of Three Wheeler Auto Rickshaw (Passenger /Loading) and its spare parts. It produces Auto Rickshaw under Atul Shakti &Atul Gem brand names. The Company is also engaged in the generation of Electricity with wind Turbine Generator at Village Gandhavi, Gujarat.

2 Basis of Preparation

The financial statements have been prepared to comply in all material respects with the standards notified under The Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under historical cost convention on an accrual basis except in case of assets for which provision for impairment is made. The accounting policies have been consistently applied by the Company and except for the changes in accounting policy discussed more fully below, are consistent with those used in the previous year.

2.1 Significant Accounting Policies

(a) Use of estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the period reported. Actual results could differ from those estimates. Any revision to accounting estimates is recognized in accordance with the requirements of the respective accounting standard.

(b) Inventories

Inventories are valued as follows:

Raw materials, components, stores and spares

Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a FIFO basis. Cost includes relevant cost of bringing those material at their present location and condition.

Work-in-progress and finished goods

Lower of cost and net realizable value. Cost includes Direct Materials and Labour and a proportion of Manufacturing Overheads based on normal operating capacity or actual production whichever is less. Cost of finished goods includes excise duty.

Net Realizable Value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

(c) Events occurring after balance date

Material events occurring after the date of balance sheet are recognized and are dealt with appropriately in accordance with generally accepted accounting principles and as provided in AS-5

(d) Depreciation

Depreciation is provided using the Straight Line Method as per the rates prescribed under schedule XIV of the Companies Act, 1956 except in case of :

Leasehold Land - amortized over the period of the lease.

Intangible Asset - Amortized over a period of 5 years as estimated by the management.

(e) Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sales of Goods

Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. Excise Duty included in the amount of turnover (gross) are deducted from turnover (gross) for disclosure of net turnover in the P&L account.

56

Interest

Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividends

Revenue is recognized when the company’s right to receive payment is established by the balance sheet date.

(f) Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use, net of CENVAT recoverable. Financing costs relating to construction of fixed assets are also included to the extent they relate to the period till such assets are ready to be put to use. Financing costs not relating to construction of fixed assets are charged to the income statements.

(g) Foreign currency transactions

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion

Foreign currency monetary items are reported using the closing rate.

(iii) Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting monetary items of company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

(h) Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current Investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost, less provision for diminution in value other than temporary.

(i) Employee Benefits

Gratuity

The Gratuity Liability is defined benefit obligation. The company has created Employees Group Gratuity Fund which has taken a Group Gratuity Insurance Policy from Life Insurance Corporation of India (LIC). Premium on above policy as intimated by LIC is charged to the Profit & Loss Account. The adequacy of balances available is compared with actuarial valuation obtained at the period end. Shortfall, if any, is provided for in the Profit & Loss Account.

Provident Fund

Retirement benefits in the form of Provident fund are a defined contribution scheme in which both employees and the Company make monthly contributions at a specified percentage of the covered employees’ salary (currently 12% of employees’ salary). The contribution is charged to the profit and loss account of the year when the contributions to the respective funds are due.

Leave Salary

The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits, for future encashment. The liability is provided based on the number of days of unutilized leave at each balance sheet date.

(j) Borrowing Cost

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying

56 57

asset are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.

(k) Segment Reporting

The company is engaged mainly in the business of automobile products. These, in the context of Accounting Standard 17 on Segment Reporting, as specified in the Companies (Accounting Standard) Rules, 2006, are considered to constitute one single primary segment. Further, there is no reportable secondary segment i.e. Geographical segment.

(l) Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period.

(m) Income Taxes

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognized, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

(n) Intangible assets

Product Development Cost

Product Development Cost incurred on new vehicles platforms, variants on existing platforms and new vehicles aggregates are recognized as intangible assets and are included under fixed assets. These amounts are amortized over sixty months from the commencement of commercial production i.e. from June 1, 2009.

SAP Implementation Charges

Expenses incurred for implementation of SAP are recognized as intangible assets and are included under fixed assets. The amounts are amortized over sixty months from the implementation of SAP i.e. from January 1, 2012

(o) Impairment

The carrying amounts of assets are reviewed at each balance sheet date if there are impairment indicators. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value in use.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

A previously recognized impairment loss is increased or decreased based on reassessment of recoverable amount, which is carried out if the change is significant. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

(p) Provisions

A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

(q) Product Warranty Expenses

The estimated liability for product warranties is recorded when products are sold. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. However any risk covered by insurance policy premium paid on such policy are charged to revenue in the year in which it is incurred.

58

Notes on Accounts

Note No.

Particulars 31.03.2013 31.03.2012

3 SHARE CAPITAL No. Amount No. Amount

(a) Authorised Share Capital

Equity Shares of Rs. 10 each 1,50,00,000 15,00,00,000 80,00,000 8,00,00,000

Issued Share Capital


Subscribed & Paid up Share Capital


Share Forfeiture 23,28,850 23,28,850

TOTAL SHARE CAPITAL 11,20,44,850 7,54,72,850

(b) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period - Equity Shares

At the beginning of the period 73,14,400 7,31,44,000 58,51,520 5,85,15,200

Issued during the period - Bonus Issue

36,57,200 3,65,72,000

Issued during the period - Right Issue

14,62,880 1,46,28,800

Outstanding at the end of the period

1,09,71,600 10,97,16,000 73,14,400 7,31,44,000

c Terms/Rights attached to Equity Shares

The company has only one class of equity shares having a per share value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share.

The company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring General Meeting. During the year ended 31 March, 2013 the amount of per share dividend recognized as distributed to equity shareholders was Rs.6/- (31 March 2012 : Rs.5)

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

d Details of shareholders holding more than 5% shares in the company

Name of Shareholder No. % of total holding No. % of total

holding

Kedia Securities Pvt.Ltd. 9,85,500 8.98% 6,57,000 8.98%

Vijay K Kedia 10,83,998 9.88% 4,13,426 5.65%

J J Chandra 8,05,303 7.34% 6,86,869 9.39%

M J Chandra 6,45,033 5.88% 4,30,022 5.88%

D J Chandra 6,33,663 5.78% 4,22,442 5.78%

H J Chandra 5,82,393 5.31% 3,88,262 5.31%

As per records of the company, including its register of shareholders/members and other declaration received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

e Disclosure of Aggregate number and class of shares allotted as fully paid up by way of bonus shares

Year of Allotment 2012-13

No of Shares Allotted 36 57 200

Class of Shares Equity Shares

58 59

4 RESERVES & SURPLUS 31.03.2013 31.03.2012

(a) Capital Reserves 30,00,000 30,00,000

(b) Security Premium Account

Opening Balance 8,43,63,850 5,51,06,250

Less: Utilised for Issue of Bonus Shares

-3,65,72,000

Add: Securities Premium credited on Right Issue

2,92,57,600

Closing Balance 4,77,91,850 8,43,63,850

(c) General Reserve

Opening Balance 2,84,21,071 1,28,30,756

Add: Transfer from Statement of Profit & Loss

2,59,19,087 1,55,90,315

Closing Balance 5,43,40,158 2,84,21,071

(d) Statement of Profit & Loss

Opening Balance 36,96,03,378 27,17,95,439

Add: Profit during the year 25,91,90,867 15,59,03,146

Less: Proposed Dividend -6,58,29,600 -3,65,72,000

Less: Tax on Proposed Dividend

-1,11,87,741 -59,32,893

Less: Transfer to General Reserve

-2,59,19,087 -1,55,90,315

Closing Balance 52,58,57,818 36,96,03,378

TOTAL RESERVE & SURPLUS 63,09,89,826 48,53,88,299

5 DEFERRED TAX LIABILITY 31.03.2013 31.03.2012

Deferred Tax Liability

Depreciation 4,81,04,500 4,61,56,400

Product Development Cost 7,03,900 15,62,600

4,88,08,400 4,77,19,000

Deferred Tax Assets

Impairment of Fixed Assets 2,98,100 2,98,100

Gratuity 11,32,000

Leave Salary 24,85,900 8,32,400

39,16,000 11,30,500

NET DEFERRED TAX LIABILITY

4,48,92,400 4,65,88,500

6 OTHER LONG TERM LIABILITY

31.03.2013 31.03.2012

Dealer’s Deposits (Unsecured) 2,57,76,000 2,04,76,000

60

7 (a) PROVISIONS 31.03.2013 31.03.2012

Long Term Provision

Short Term Provision

Long Term Provision

Short Term Provision

Provision for Employee BenefitsGratuity 89,58,602 54,68,032 Leave Salary 19,34,398 57,27,434 6,18,923 19,46,697 Sub-Total 19,34,398 1,46,86,036 6,18,923 74,14,729 Other ProvisionsProvision for After Sales Service

69,54,800 58,90,600

Provision for PDI/WRC coupon

10,69,188 10,08,288

Provision for Warranty Claims 1,13,03,310 72,50,212 Provision for Finance Subvention

61,60,500 -

Provision for Income Tax 1,06,42,893 1,63,76,614 Provision for Wealth Tax 1,60,000 3,40,000 Proposed Dividend 6,58,29,600 3,65,72,000 Provision for tax on Proposed Dividend

1,11,87,741 59,32,893

Sub-Total 11,33,08,031 7,33,70,607 TOTAL PROVISION 19,34,398 12,79,94,067 6,18,923 8,07,85,336

(b) Provision for Gratuity

The company has a defined benefit gratuity plan. Every employee who has completed five years or more service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following table summaries the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the respective plans.

Net Employee Benefit Expense recognized in the employee cost

31.03.2013 31.03.2012

Current Service Cost 31,43,091 25,90,779 Interest cost on benefit obligation

10,27,037 -

Expected return on plan assets -6,74,348 - Net actuarial (Gain)/Loss recognized in the year

29,94,791 58,77,253

Net Benefit Expenses 64,90,570 84,68,032 Benefit asset/liabilityPresent Value of defined benefit obligation

2,03,66,966 1,28,37,957

Fair Value of Plan Assets -1,14,08,364 -73,69,925 Plan Asset/(Liability) 89,58,602 54,68,032 Changes in the present value of the defined benefit obligation are as follows:Opening defined benefit obligation

1,28,37,957 -

Interest Cost 10,27,037 - Current service cost 31,43,091 25,90,779 Benefit paid -4,96,339 -14,80,460 Actuarial (gains)/losses on obligation

38,55,220 1,17,27,638

60 61

Closing defined benefit obligation

2,03,66,966 1,28,37,957

Changes in the fair value of plan assets are as follows:

Opening fair value of plan assets

73,69,925 -

Expected return 6,74,348 -

Contribution by employer 30,00,000 30,00,000

Benefit s paid -4,96,339 -14,80,460

Actuarial gains/(losses) 8,60,430 58,50,385

Closing fair value of plan assets

1,14,08,364 73,69,925

The major categories of plan assets as a percentage of the fair value of total plan assets are as follows

Investments with Insurer 100% 100%

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

The principal assumptions used in determining gratuity benefit obligations for the company’s plan are shown below:

Particulars 31.03.2013 31.03.2012Discount rate 8.00% 8.00%Expected rate of return on assets

9.15% 9.15%

The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand of the employment market.Amounts for the current and previous to periods are as follows

2011-12 2010-11 2009-10 2008-09

Defined Benefit Obligation 1 28 37 957 1,12,09,434 69 29 549 41,11,665 Plan Assets 73 69 925 57,26,166 42,00,919 30,80,941

(c) Provision for Warranties

A provision is recognized for expected warranty claims for ATUL SHAKTI & ATUL SMART sold for last 6 months and for ATUL GEM sold for last 8 months, based on past experience of the level of repairs and returns. It is expected that significant portion of these costs will be incurred in the next financial year. Assumption used to calculate the provision for warranties were based on current sales levels and current information available about returns based on the warranty period for all products sold. The table given below gives information about movements in warranty provisions.

At the beginning of the year 72,50,212 23,35,544 Arising during the year 1,77,81,198 2,07,94,965 Utilised during the year -1,37,28,100 -1,58,80,297 At the end of the year 1,13,03,310 72,50,212

(d) Provision for After Sales Services & WRC

At the beginning of the year 68,98,888 43,03,188 Arising during the year 1,75,16,726 1,48,24,625 Utilised during the year -1,63,91,626 -1,22,28,925 At the end of the year 80,23,988 68,98,888

62

8 SHORT TERM BORROWINGS 31.03.2013 31.03.2012

Cash Credit from IDBI Bank - 3,88,65,281

Cash Credit facilities from IDBI Bank is secured by current assets (viz. stock and book debts both current and future) of the company and hypothecation of entire fixed assets of the company and personal guarantee of some of the directors of the company.

9 TRADE PAYABLES 31.03.2013 31.03.2012

Against Materials 20,85,16,985 12,84,38,123

Against Capital Goods 51,36,552 5,79,421

Against Transportation Expenses 1,48,96,597 1,03,02,404

Others 88,91,986 1,74,76,514

TOTAL 23,74,42,120 15,67,96,462

Details of dues to Micro, small and Medium Enterprises as per MSMED Act, 2006

The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company. The amount of principal and interest outstanding as at 31.03.13 is given below:

Particulars 31.03.2013 31.03.2012

(i) Amounts unpaid as at year end 2,99,47,557 1,19,39,647

(ii) Amounts paid after appointed date during the year

- -

(iii) Amount of interest accrued and unpaid as at year end

- -

(iv) Amount of interest paid during the year as per section 16

- -

10 OTHER CURRENT LIABILITIES 31.03.2013 31.03.2012

Investor Education and Protection Fund will be credited by following amount (as and when due)*

Unpaid Dividends 21,60,862 9,18,940

Dues to Investor Education and Protection Fund

- 89,429

Advances from Customers 90,92,912 2,52,43,245

Statuary Dues 3,12,82,793 2,92,11,400

Other Liabilities 59,05,525 58,17,607

TOTAL 4,84,42,091 6,12,80,621

62 63

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64

11. FIXED ASSETSINTANGIBLE ASSETS Product Development

ExpenseSAP TOTAL

CostCost As at 31st March, 2011 1 95 09 921 - 1 95 09 921Cost - 74 41 718 74 41 718Disposals - - As at 31st March, 2012 1 95 09 921 74 41 718 2 69 51 639Cost - - - Disposals - - - As at 31st March, 2013 1 95 09 921 74 41 718 2 69 51 639AmortisationAs at 31st March, 2011 71 53 634 - 71 53 634Additions 39 01 980 3 58 820 42 60 800Disposals - - - As at 31st March, 2012 1 10 55 614 3 58 820 1 14 14 434Additions 39 01 980 14 88 348 53 90 328Disposals - - - As at 31st March, 2013 1 49 57 594 18 47 168 1 68 04 762Net BlockAt 31 March 2012 84 54 307 70 82 898 1 55 37 205At 31 March 2013 45 52 327 55 94 550 1 01 46 877

12 NON-CURRENT INVESTMENT 31.03.2013 31.03.2012

Trade Investments (Valued at cost unless stated otherwise)

Investment in Equity Instrument (Quoted)

31,620 31,620

310 shares in Suzlon Energy Limited of Rs. 2 each valued at cost (market value as at 31/03/2013 is Rs.4,232/-(PY Rs.7843/-)

Extent of Holding less than 1% less than 1%

Non- Trade Investments (Valued at cost unless stated otherwise)

Government Security (Unquoted) 3,000 3,000

Investment in Associates (Unquoted)

1,22,60,640 1,22,60,640

22,96,000(previous year 22,96,000) equity shares of Rs. 10 each in Khushbu Auto Finance Limited

(At cost less provision for other than temporary diminution of Rs.1,06,99,360/- (PY 1,06,99,360/-))

Extent of Holding 49.91% 49.91%

TOTAL 1,22,95,260 1,22,95,260

64 65

13 LONG TERM LOANS & ADVANCES

31.03.2013 31.03.2012

Advances for Capital Goods (Unsecured Considered Good)

2,54,25,190 3,51,70,064

Security Deposit (Unsecured Considered Good)

44,48,972 35,54,166

Balance with Govt authority 85,97,378 71,48,977

TOTAL 3,84,71,540 4,58,73,207

14 INVENTORIES 31.03.2013 31.03.2012

Raw Material 16,51,84,589 22,65,21,189

Work In Progress 70,68,575 1,00,80,828

Finished Goods 5,72,16,330 6,16,47,813

TOTAL 22,94,69,494 29,82,49,830

15 TRADE RECEIVABLES 31.03.2013 31.03.2012

Unsecured Considered Good

Outstanding for more than 6 months

8,68,423 6,76,635

Others 7,06,49,307 6,01,32,008

TOTAL 7,15,17,730 6,08,08,643

Trade Receivables includes:

Dues from partnership firm in which the company's directors' relative are partners

18,21,536 54,26,124

Dues from company in which the company's directors' relative are directors/ shareholders

- 3,72,77,631

16 CASH & CASH EQUIVALENT 31.03.2013 31.03.2012

Balances with Bank

In Current Accounts 2,71,75,685 4,63,21,541

In unpaid dividend account

21,60,862 10,08,269

In Fixed Deposit Account 1,22,81,903 11,28,608

Cash on Hand 9,00,392 73,293

Investment in securities for maturities less than 90 days

33,82,14,142 6,51,96,958

TOTAL 38,07,32,984 11,37,28,669

66

Balance With Current Account includes

31.03.2013 31.03.2012

State Bank of India - AAL Employee Super Annuation Fund A/C

9,520 9,470

Corporation Bank - 10,000

HDFC - Current Account 15,926 3,844

ICICI BANK - EEFC A/c 26,86,831

HDFC Bank – Current Account - 65,613

IDBI Bank – Current Account 25,000 3,17,30,081

IDBI BANK – FDOD Account 74,40,166 -

IDBI BANK – Cash Credit Account

94,93,307 -

ICICI Bank – Current Account 75,04,935 1,44,89,047

State Bank of India–Current A/c

- 13,486

TOTAL 2,71,75,685 4,63,21,541

17 SHORT TERM LOANS & ADVANCES

31.03.2013 31.03.2012

Advances to be received in cash or in kind

1,28,39,389 1,65,83,912

Advances to Suppliers 93,94,110 1,50,90,960

Advance to Employees 5,10,533 4,95,900

Pre paid Expenses 29,34,746 9,97,052

Balances with Govt Authority 27,62,514 27,75,518

TOTAL 1,56,01,903 1,93,59,430

18 OTHER CURRENT ASSETS 31.03.2013 31.03.2012

Other assets 7,55,555 5,22,464

TOTAL 7,55,555 5,22,464

19 REVENUE FROM OPERATIONS 31.03.2013 31.03.2012

Sales of Vehicles 3,95,99,93,235 3,18,56,55,238

Sales of Spares 11,46,02,362 10,10,41,810

Less: Excise Duty -44,59,97,606 -30,69,18,239

3,62,85,97,991 2,97,97,78,809

Other Operating Revenue 98,06,269 84,58,081

TOTAL 3,63,84,04,260 2,98,82,36,890

Details of Product Sold

Atul Gem 2,18,75,03,622 1,73,28,89,860

Atul Shakti 1,20,90,05,300 98,15,88,477

Atul Smart 13,04,01,026 17,47,07,775

Atul Gemini 7,71,750 -

Spares 10,09,16,293 9,05,92,697

TOTAL 3,62,85,97,991 2,97,97,78,809

66 67

20 OTHER INCOME 31.03.2013 31.03.2012

(a) Dividend 1,83,51,636 55,32,792

Gain on Sale of Mutual Fund

3,93,864

Gain on Revaluation of Mutual Fund

19,360

Interest

Bank FD 8,15,392 80,937

Dealers - 1,86,602

Other Deposits 1,51,566 1,32,104

Profit on sale of Fixed Assets

30,000

TOTAL 1,97,61,818 59,32,435

(b) Dividend includes dividend from Current Investment including investment in securities for less than 90 days.

21 COST OF MATERIAL CONSUMED

31.03.2013 31.03.2012

Opening Stock 22,65,21,189 16,30,00,957

Purchase 2,64,99,04,527 2,37,49,89,215

Purchase Expenses 9,71,96,368 8,56,13,696

Processing Charges 2,31,11,681 2,14,67,165

Closing Stock -16,51,84,589 -22,65,21,189

TOTAL 2,83,15,49,177 2,41,85,49,844

Major Components of Raw Material Consumption

Engine 94,59,24,186 74,23,41,978

Tyre 20,10,14,357 14,83,31,677

Battery 7,04,16,131 5,07,71,344

Other material, Process Charge and Purchase Expenses

1,61,41,94,503 1,47,71,04,845

TOTAL 2,83,15,49,177 2,41,85,49,844

22 CHANGES IN INVENTORIES OF FINISHED GOODS WORK-IN-PROGRESS AND STOCK-IN-TRADE

31.03.2013 31.03.2012

Work-in-process

Opening Stock 1,00,80,828 2,63,55,047

Closing Stock 70,68,575 1,00,80,828

30,12,253 1,62,74,219

Finished Goods

Opening Stock 6,16,47,813 23,82,801

Closing Stock 5,72,16,330 6,16,47,813

44,31,483 -5,92,65,012

TOTAL 74,43,736 -4,29,90,793

68

23 EMPLOYEE BENEFIT EXPENSES

31.03.2013 31.03.2012

Salary, Wages & Bonus 16,41,22,305 13,13,06,935

Directors Remuneration 1,27,26,876 88,62,007

Gratuity Expenses 64,90,570 29,84,764

Contribution to PF 1,07,12,372 95,18,173

Staff Welfare Exp 1,60,55,525 1,33,65,485

TOTAL 21,01,07,648 16,60,37,364

24 FINANCE COST 31.03.2013 31.03.2012

Interest Expenses 16,63,899 52,86,772

Interest on Income Tax 14,07,327 11,39,874

Bank Charges 2,52,392 2,21,555

Other Borrowing Cost 7,09,454 9,98,915

TOTAL 40,33,072 76,47,116

25 DEPRECIATION & AMORTISATION

31.03.2013 31.03.2012

Depreciation 3,89,80,584 3,80,10,093

Impairment - 3,17,728

Amortisation 53,90,328 42,60,800

TOTAL 4,43,70,912 4,25,88,621

26 OTHER EXPENSES 31.03.2013 31.03.2012(Increase)/Decrease of excise duty on Finished Goods

-2,27,177 77,30,110

Advertising & Sales Promotion

4,25,56,470 3,01,55,828

Auditor's Remuneration 11,74,614 9,74,076

Bonus Issue Exp 9,61,510 -

Communication Cost 34,06,371 32,26,384

Director's Sitting Fees 46,000 54,000

Donation 30,25,113 20,38,621

Exchange Rate Difference -23,630 3,25,688

Freight & Forwarding Exp 74,59,023 39,73,066

Insurance 7,97,056 4,93,772

Legal & consultancy Charges

38,99,292 57,86,946

Office Admin Exp 39,68,572 39,15,813

Other misc exp 52,69,910 21,96,563

Power & Fuel 1,81,80,507 1,80,22,836

Printing & Stationary 30,70,016 17,39,333

Rates and taxes 7,20,594 7,26,865

Rent 33,05,873 25,56,073

Repairs to buildings 58,81,007 32,15,312

68 69

26 OTHER EXPENSES 31.03.2013 31.03.2012Repairs to Machinery 1,01,58,767 1,58,26,148

Repairs to Others 1,33,44,178 88,07,858

Research & Development Exp

8,02,813 2,21,133

Right Issue Exp 50,000 10,93,411

Travelling & Conveyance 2,71,74,987 2,24,33,133

Vehicle Exp 14,73,602 12,70,197

Warranty & After Sales Services

3,15,27,265 3,33,25,996

Windmill Operation Charges

4,57,376 10,59,125

TOTAL 18,84,60,109 17,11,68,288

Auditor’s Remuneration includes

For Audit Fee 7,00,000 6,00,000

For Limited Review 75,000

For Taxation matters 3,50,000 3,60,500

Other Matters 17,500

Reimbursement expense 32,114 13,576

TOTAL 11,74,614 9,74,076

27 EXCEPTIONAL ITEMS 31.03.2013 31.03.2012

Provision for diminution in investment

- 1,06,99,360

Profit on sale of windmill - -1,19,79,914

TOTAL - -12,80,554

28 TAX EXPENSES 31.03.2013 31.03.2012

Current Tax 11,84,54,000 8,41,44,000

Tax of Earlier years -37,47,343 -1,16,937

11,47,06,657 8,40,27,063

Deferred Tax -16,96,100 -74,80,770

TOTAL 11,30,10,557 7,65,46,293

29 EARNING PER SHARE 31.03.2013 31.03.2012

BEFORE BONUS

Net profit as per P & L 25,91,90,867 15,59,03,146

No. of Shares 73,14,400 62,93,403

TOTAL 35.44 24.77

AFTER BONUS

Net profit as per P & L 25,91,90,867 15,59,03,146

No. of Shares 1,09,71,600 94,40,105

TOTAL 23.62 16.51

70

30 CONTINGENT LIABILITIES NOT ACKNOWLEDGE AS DEBT

31.03.2013 31.03.2012

Sales Tax 78,02,531 2,02,531

CST 11,83,791 11,83,791

Excise Duty 17,84,610 17,84,610

Service Tax 4,74,336 4,74,336

Income Tax 1,00,85,833 69,45,763

PGCVL 23,46,556

Case Pending before Consumer Forum

32,42,415 33,36,665

Case filed by investor for non allotment of right issue shares

13,46,259

Case filed by the Supplier in the Court

11,17,29,796 11,17,29,796

TOTAL 13,99,96,127 12,56,57,492

31 ESTIMATED AMOUNT OF CONTRACTS REMAINING TO BE EXECUTED ON CAPITAL ACCOUNTS AND NOT PROVIDED FOR

31.03.2013 31.03.2012

For purchase of Residential Property

46,30,180 35,36,343

Others 96,64,334 8,17,34,893

TOTAL 1,42,94,514 8,52,71,236

32 UTILISATION OF MONEY REALISED THROUGH PUBLIC ISSUE

31.03.2013 31.03.2012

During the year ended on March 31, 2012 the company has raised Rs.4,38,86,400/- through Right Issue. The details of utilisation of the fund are as below Right Issue Expenses - 15,00,000

Business Expansion in few states

- 1,00,00,000

Repayment of Term Loan - 3,23,86,400

TOTAL - 4,38,86,400

33 VALUE OF IMPORT ON CIF BASIS

31.03.2013 31.03.2012

Purchase of Raw material 1,38,132 2,74,401

Other Spares - -

34 Expenditure in foreign currency (accrual basis)

31.03.2013 31.03.2012

Travelling 26,97,471 22,00,323

70 71

35 Net dividend remitted in foreign exchange

31.03.2013 31.03.2012

Period for which it relates 2011-12 2010-11

No. of Non Resident Shareholders

2 25

No. of Equity Shares held on which dividend was due

36,000 1,99,360

Amount Remitted 1,80,000 7,97,440

36 Earnings in foreign currencies

31.03.2013 31.03.2012

Export at F.O.B. Value of vehicle and spares

3,04,50,263 2,65,34,872

Technical service income 33,13,883 -

37 CONSUMPTION 31.03.2013 31.03.2012

Amount % Amount %

Imported 1,38,132 0.005% 2,74,401 0.01%

Indigenous 2,83,14,11,045 99.995% 2,41,82,75,443 99.99%

Total 2,83,15,49,177 100% 2,41,85,49,844 100%

38 RELATED PARTY DISCLOSURE (a) Name of Related Parties

Associate Company Khushbu Auto Finance Limited

Key Management Personnel

J J ChandraMahendra J PatelNiraj J Chandra

Chairman & Managing Director Whole time Director Whole time Director

Enterprises owned or significantly influenced by key personal management or their relatives

Atul Auto AgencyAtul Auto IndustriesAtul AutomotivesAtul Motors Pvt. Ltd.Atul PetroleumKhushbu Auto Private LimitedNew Chandra Motor Cycle AgencyNew Chandra Motor Cycle House

72

38 RELATED PARTY DISCLOSURE 31.03.2013 31.03.2012(b) Transaction with Related Parties

Enterprises owned or significantly influenced by key personal management or their relatives

Sales (inclusive of tax) 49,99,96,589 46,98,56,948

Purchase (inclusive of tax) 2,86,517 3,26,78,576Warranty Claims/After Sales Service/PDI/WRC Charges

17,99,192 14,00,501

Sales Incentive & Promotion 1,46,500 1,13,750

R & D exp 16,762 51,790

Purchase of Fixed Assets 1,50,000

Vehicle Repairing Exp 89,908 1,23,061After Sales Service Receivable

13,200 10,400

Reimbursement 2,51,395 9,641

Key Managerial Personnel

Remuneration 1,27,26,876 86,67,742

Reimbursement 13,92,900 10,92,876

TOTAL 1,41,19,776 97,60,618

Relatives of Key Managerial ersonnel

Remuneration 5,62,500 831699

Reimbursement 11259 256988

TOTAL 5,73,759 1088687

(c) Balance outstanding as at the end of the Year

Receivable Enterprise owned or significantly influenced by key management personnel or their relatives

18,21,536 4,86,19,486

Payable 23,23,816

Equity Capital Contribution Associate 2,29,60,000 2,29,60,000

Disclosure in respect of Material Transaction with Related Parties

Sales of Goods

Khushbu Auto Private Limited

44,48,73,053 42,78,12,426

New Chandra Motor Cycle Agency

4,95,10,100 3,46,90,111

New Chandra Motor Cycle House

56,13,436 72,01,397

Purchase of GoodsNew Chandra Motor Cycle House

4,32,606 1031290

Warranty Claim /After Sales Service Payable/PDI/WRC Charges

Khushbu Auto Private Limited

1538008 1286831

New Chandra Motor Cycle Agency

261184 107790

As per our report of even date For Maharishi & Co., Chartered Accountants Firm Reg. No. 124872W





72 73

ATUL AUTO LIMITED

ECS Mandate Form

I hereby authorized you to make all payments in respect of my holding in your Company to my bankersfor crediting to my account as detailed below:

1. Share holder’s Name :

( In Block Letters) (First holder)

:

(Joint holder, if any)

2. Folio Number/DP ID :

and Client Id No.

3. Number of Shares held :

4. Name of the bank :

5. Branch name and address :

6. Account Type : SB A/c [ ] Current A/c [ ] Others [ ]

[Mark‘X’intheapproximatebox] (pleasespecify)

7. Bank Account number :

8. IFSC Code :

9. Nine digit MICR code number of the account :

and branch code appearing on the cheque

I/We hereby declare that the particulars given above are correct and complete. If credit is not effected for the reason(s) of incomplete or incorrect information. I/We would not hold the Company responsible.

Date: …………………………………………

(Signature of the first holder)

(as appearing in the company’s records)

…………………………………………………………………………………………………………………………………………………………………………………………………….................……

Certificate of the Investor’s Bank

Certified that the particulars of the bank account furnished above are correct as per our records.

Bank Stamp:

Date : ………………………………………………………………………… Signature of the authorized official of the bank

Note : Please attach a photocopy of cheques issued by your bank relating to your above account for verifying of the code number.

74 75

Attendance Slip & Proxy Form

Atul Auto LimitedRegistered Office: National Highway 8-B, Near Microwave Tower, Shapar (Veraval), Dist. Rajkot-360024, Gujarat.

PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL.Joint Share Holders may obtain additional Slip at the venue of the meeting.

DP ID* Master Folio No.

Client ID* No. of Shares

NAME AND ADDRESS OF THE SHAREHOLDER: ____________________________________________________________

I hereby record my presence at the 25thANNUAL GENERAL MEETING of the Company held on Tuesday, July 16, 2013 at 11 : 00 AM at the registered office of the Company.

____________________________

Signature of shareholder/proxy

*Applicable for investors holding Shares in electronic form.

Proxy FormAtul Auto Limited

Registered Office: National Highway 8-B, Near Microwave Tower, Shapar (Veraval), Dist. Rajkot-360024, Gujarat

DP ID* Master Folio No.

Client ID*

I/We of being amember/members of Atul Auto Limited hereby appoint

of or failing him/her of

as my/our proxy to vote for me/us and on my/our

behalf at the 25th Annual General meeting of the company to be held on Tuesday, July 16, 2013 at 11:00 AM and any adjournment thereof.

** I wish my above proxy to vote in the manner as indicated in the box below:

Resolutions For Against1. Adoption of Accounts, report of board of Directors and Auditors.2. Declaration of Dividend on Equity Re-appointment of Following Directors Retiring By rotation:3. Mahendra J Patel4. Niraj J Chandra5. Appointment of Auditor Appointment of following Additional Directors as Director:6. CA S T Shah7. CA Hemantkumar J Bhatt8. Hasmukh H Adhvaryoo9. Re-appointment and revision of remuneration of J J Chandra as the Chairman & Managing Director10. Re-appointment and revision of remuneration of M. J. Patel as the Whole time Director11. Revision of remuneration of N. J. Chandra, Whole time Director

Signed this____________________ day of_________2013 ______________ Signature* Applicable for investor holding shares in electronic form.NOTE :1. The proxy, to be valid, should be deposited at the registered office of the company at National Highway 8-B, Near Microwave Tower, Shapar

(Veraval), Dist. Rajkot-360024, Gujarat not less than 48 hours before the time fixed for holding the meeting or adjourned meeting.2. A proxy need not be a member of the company.3. **Thisisonlyoptional.PleaseputanXintheappropriatecolumnagainsttheresolutionsindicatedinthebox.Ifyouleavethe‘For”and

‘Against’columnblankagainstanyoralltheresolutions,yourproxywillbeentitledtovoteinthemannerashe/shethinksappropriate.Should you so desire, you may also appoint the chairman or the company secretary of the company as your Proxy, who shall carry out your mandate as indicated above in the event of a poll being demanded at the meeting.

4. Appointing a proxy does not prevent a member from attending the meeting in person if he so wishes.5. In case of joint holders, the signature of any one holder will be sufficient, but names of all the joint holders should be stated.

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